NFIP Policy Changes

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This page contains details about NFIP Policy Changes.
Find more NFIP information in the How To Endorse section of the Flood Insurance Manual.

Endorsement Types

Level	Category	Description	Examples	Complexity Rationale
1	Administrative Changes	Basic updates to policy information without affecting coverage or premiums. Requires minimal documentation.	- Updating mortgagee clause (name, address, loan number) - Correcting typos - Adding unit numbers to addresses	No premium impact, straightforward, and minimal insurer involvement.
2	Ownership and Agent-Related Changes	Updates involving stakeholders like ownership transfers or agent changes. May require supporting documentation and signatures.	- Assigning policy to new property owner - Changing agent of record	Involves validation by insurer and requires key stakeholder updates.
3	Non-Premium-Bearing Coverage Adjustments	Coverage changes without premium adjustments. Typically involve removing duplications or aligning coverage with valid explanations.	- Removing duplicate coverage - Reducing building coverage (e.g., after partial demolition)	Requires documentation and review but no financial recalculations.
4	Premium-Bearing Coverage Adjustments	Changes affecting premiums. Require FEMA calculations and may involve waiting periods, prorated amounts, or refunds.	- Adding/increasing coverage - Decreasing deductible - Applying rating corrections (e.g., First Floor Height)	Financial recalculations, documentation, and interaction with FEMA’s rating engine add complexity.
5	Geolocation and Address-Driven Changes	Changes affecting insured property location or flood zone classification. Require detailed documentation and often FEMA coordination.	- Correcting address with geolocation impact - Adjusting policy for SFHA map revisions	Requires geocoding validation, potential flood zone changes, and FEMA interaction.
6	Multifactorial Adjustments	Complex endorsements combining multiple changes, often requiring extensive documentation and strict sequencing.	- Transitioning provisional to rating engine rates - Applying completed construction updates - Address corrections affecting zones	Involves integrating documentation, financial recalculations, and system updates. Coordination and sequencing are critical.

Level	Category	Description	Examples	Complexity Rationale

1	Administrative Changes or Corrections	Simple updates or corrections to policy information without affecting coverage or premiums.	- Correcting typos - Updating mailing addresses - Adding unit numbers to addresses	No premium impact, minimal documentation, and strictly operational.

2	Changes to Interested Parties	Updates involving policyholders or agents, such as transferring ownership or changing agents of record.	- Assigning policy to a new owner - Changing agent of record	Requires supporting documentation and validation but does not affect coverage or rating.

3	Policy Detail Corrections	Adjustments to correct policy details that may or may not affect premiums. Effective date is always the policy inception date.	- Correcting Building Replacement Cost Value (BRCV) errors - Updating number of floors on the insured building	Documentation required, but effective date tied to policy inception simplifies adjustments.

4	Policy Detail Changes	Changes to policy details based on real-world events. May or may not affect premiums. Effective date reflects the event date.	- Adjusting foundation type after construction updates - Removing portions of buildings no longer present	Real-world event complexity; effective dates must align with the event causing the change.

5	Coverage Increases	Increasing building or contents coverage, typically requiring additional premium. Involves waiting period rules.	- Adding coverage during policy term - Increasing contents coverage following a loan closing	Introduces waiting period rules and strict documentation requirements.

6	Coverage Decreases	Reducing coverage, typically resulting in a refund. Includes criteria like property damage or over-insuring.	- Reducing building coverage after partial demolition - Removing contents coverage when contents are sold	Requires valid explanations and effective dates reflecting the change or correction.

7	Geolocation Corrections	Updates to property address or flood zone that may require additional documentation and NFIP rating engine updates.	- Correcting address discrepancies with geolocation impact - Adjusting flood zone after map revisions	Complex due to geocoding, flood zone impacts, and required FEMA validation.

8	Multifactorial Premium-Bearing Adjustments	High-complexity endorsements involving multiple changes and rating adjustments.	- Transitioning provisional to rating engine rates - Applying completed construction updates	Integrates multiple processes, documentation, and system interactions. Coordination and sequencing are