Eligibility for NFIP Coverage

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To qualify for coverage under the National Flood Insurance Program (NFIP), specific criteria must be met concerning the property's location, the building's characteristics, and the nature of the insured contents. This guide outlines these eligibility requirements and helps agents verify compliance.

Property Location Eligibility

NFIP coverage is available for properties in specific locations:

Eligible Locations

• Participating NFIP Communities: Properties must be located within communities that participate in the NFIP. Participation requires adoption of floodplain management ordinances meeting or exceeding NFIP criteria.
• Federal Lands: Buildings on federal lands may qualify if the local community adheres to NFIP floodplain management standards.

Ineligible Locations

• Non-Participating Communities: NFIP cannot sell or renew policies for properties in non-participating communities.
• Suspended Communities: Coverage is unavailable in communities suspended from the NFIP.
• Coastal Barrier Resources System (CBRS) and Otherwise Protected Areas (OPA): Flood insurance is not available in designated CBRS or OPA zones unless exceptions apply.

Building Eligibility

To qualify for NFIP insurance, buildings must meet certain structural criteria:

General Building Requirements

• Must be affixed to a permanent site.
• Must have at least two outside rigid walls and a fully secured roof.
• Must resist flotation, collapse, and lateral movement.
• At least 51% of the building's Actual Cash Value (ACV), including machinery and equipment, must be above ground level unless compliant with Base Flood Elevation (BFE) regulations.

Eligible Building Types

• Residential Properties: Single-family homes, multi-family dwellings, and condominiums.
• Non-Residential Properties: Commercial and mixed-use buildings, agricultural buildings, and boathouses.
• Special Structures: Manufactured homes, timeshares, and detached garages under specific conditions.

Ineligible Buildings

• Buildings in violation of local or federal floodplain management regulations.
• Structures entirely over water and constructed after October 1, 1982.
• Properties used for the manufacture or distribution of controlled substances.

Contents Eligibility

Contents coverage is tied to building eligibility and must meet the following criteria:

Dwelling and General Property Forms

• Contents must be located within the insured building.
• Secured to prevent flotation if the building is not fully enclosed.

Exclusions

• Automobiles and motorcycles.
• Bailee customer goods.
• Motorized equipment in dealer stock.

Insurable Interest

NFIP requires policyholders to have an insurable interest in the property. Examples include:

• Ownership Interest: Homeowners, landlords, and tenants.
• Mortgagee Interest: Lenders with financial stakes in the property.
• Lease Agreements: Tenants required to insure the building per lease terms.

Group Flood Insurance Policies (GFIP)

Issued under federal disaster programs, GFIPs provide temporary coverage for eligible recipients. These policies:

• Are valid for 36 months.
• Do not include Increased Cost of Compliance (ICC) coverage.
• Can be converted to standard SFIPs without a waiting period if conditions are met.

Resources for Agents

• NFIP Community Status Book
• FEMA Elevation Certificate and rating tools.
• NFIP Flood Insurance Manual (April 2024).

Conclusion

NFIP eligibility rules ensure coverage is available for qualifying properties while adhering to federal floodplain management standards. Agents play a key role in verifying compliance and guiding policyholders through the application process.

This page contains information about the NFIP. Find more NFIP Resources.