NFIP Policy Changes

This page is a rough draft and will need more work before it's finalized.

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

NFIP Policy Changes

The NFIP allows the policy details that were recorded on the application to be amended. The policy contract is not changed, as is common practice with P&C endorsements. An NFIP endorsement is not a rider. Although the NFIP uses the word "endorsement" to identify the process of policy detail change or correction, its use has been minimized in favor of the phrase "policy changes".

Policy changes range from simple administrative updates to complex procedures involving rating factors and FEMA approval. Equinox will create the documents required for NFIP compliance based on agent inputs. Therefore, it is the agent's responsibility to understand how to apply policy changes effectively.

Documentation

The agent is responsible for providing two types of documents.

Proof of changes (e.g., replacement cost calculations, photographs, Elevation Certificates)
Signed forms

Effective Dates

Effective dates depend on the type of policy change:

Administrative changes align with the processing date.
Policy detail corrections use the policy’s inception date.
Coverage changes or real-world updates (e.g., construction or demolition) align with the event date.
Waiting period rules may apply to specific changes, like adding new coverage.

Premium Impact

Premium may be required or returned based on the type of policy change. Not all policy changes require premium changes. If additional premium is required, then it must be received before the policy change is completed.

Non-premium-bearing: No impact on premiums (e.g., address corrections, adding mortgagee information).
Premium-bearing: Adjustments to coverage or rating factors that increase or decrease premiums.

Best Practices for Agents

Start Simple: Focus on basic endorsements first (Levels 1 and 2) before tackling more complex scenarios.
Use Checklists: Maintain a checklist of required forms and documentation for each endorsement type.
Stay Updated: Familiarize yourself with NFIP guidelines, including waiting periods and rating rules.
Ask for Help: Escalate complex cases to underwriting.

NFIP Policy Change Types

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