NFIP Coverage Exceptions

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Under Construction

In the context of NFIP coverage, Buildings Under Construction—commonly referred to as "Builder's Risk" in the insurance industry—are covered under the Standard Flood Insurance Policy (SFIP) rather than as a separate policy type. This differs from the standard approach in Property and Casualty insurance, where builder's risk is often a standalone policy. Coverage applies to buildings undergoing construction, alteration, or repair prior to being fully walled and roofed. The coverage ensures protection against flood damage during critical phases of construction, provided eligibility and documentation requirements are met.

Eligibility for Coverage

1. Coverage applies to buildings under construction, alteration, or repair.
2. The structure must not yet be fully walled and roofed for initial coverage eligibility.

Limitations

1. Coverage excludes structures where the lowest floor is below the Base Flood Elevation (BFE) in specific flood zones (e.g., AE, VE) until the building is fully walled and roofed.
2. If construction is temporarily halted, coverage extends for up to 90 continuous days.

Special Provisions

1. Materials and supplies stored in a fully enclosed building at the insured location or adjacent property are covered under specific conditions.
2. Policyholders must comply with all terms of the SFIP, including accurately identifying the structure and ensuring insurable interest.

Buildings Over Water

The NFIP provides coverage for Buildings Over Water under specific conditions outlined in the Standard Flood Insurance Policy (SFIP). These provisions ensure that unique risks associated with such structures are addressed while maintaining adherence to floodplain management regulations.

Buildings Partially Over Water

1. Coverage applies if part of the building’s foundation or exterior walls is on land or on the landward side of mean high tide.
2. Structures must comply with NFIP standards and local floodplain management requirements.
3. Documentation Required:
   • A description or map verifying the building's location partially over water and partially on land.
   • Certification from a community official confirming compliance with floodplain regulations.

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Buildings Fully Over Water

1. Eligibility for Buildings Constructed Before October 1, 1982:
   • Fully over-water buildings constructed or substantially improved before this date are eligible.
2. Documentation Required:
   • Records proving the construction or substantial improvement occurred before the cutoff date.
   • Verification of compliance with local floodplain requirements, if applicable.

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Boathouses

1. Coverage applies to non-boathouse portions of the building used for residential, commercial, or municipal purposes.
2. Exclusions:
   • The ceiling and roof above boathouse areas used to float boats.
   • Floors, walls, and contents located within the boathouse used specifically for boat operation or storage.
3. Documentation Required:
   • Floor plans or usage details to distinguish non-boathouse areas.
   • Community official’s certification of eligibility.

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Buildings Fully Over Water Due to Erosion

1. Eligibility applies if a building originally constructed on land transitions fully over water due to erosion or similar natural causes.
2. Continuous NFIP coverage is required for at least one year before the building becomes entirely over water (or since construction, if less than a year).
3. Documentation Required:
   • A letter from a community official verifying the building’s original construction location.
   • Photographs showing the building before and after the transition, if available.
   • Proof of continuous NFIP coverage.

Buildings Below Ground

Buildings constructed partially or primarily below ground level are subject to strict eligibility criteria under the NFIP. The Standard Flood Insurance Policy (SFIP) allows limited coverage for such buildings, provided they meet specific floodplain management and construction standards.

Eligibility Requirements

1. The lowest floor must be at or above the Base Flood Elevation (BFE).
2. The building must utilize earth as insulation material in conjunction with energy-efficient building techniques.

Documentation Requirements

1. An elevation certificate or equivalent documentation to demonstrate compliance with the BFE requirement.
2. Building schematics or plans verifying the use of earth insulation and compliance with NFIP standards for energy efficiency.

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