Flood Insurance as an industry has a lot of terms that the general public may not be aware of. Here is a compilation of various terms you may see inside your flood insurance policy. This flood insurance glossary is not all encompassing and your policy may have additional or different terms and definitions; this is only a reference.
Flood Insurance Glossary
“Act” means the National Flood Insurance Act of 1968, and any acts amendatory thereof.
“Actual Cash Value” means the replacement cost of an insured item of property at the time of loss, less the value of physical depreciation as to the item damaged.
“Association” means the group of unit owners which manages the condominium building in which your insured unit is located.
“Base Flood” means the flood having one percent chance of being equalled or exceeded in any given year.
“Basement” means any area of the building, including any sunken room or sunken portion of a room, having its floor subgrade (below ground level) on all sides.
“Building” means a walled and roofed structure, other than a gas or liquid storage tank, that is principally above ground and affixed to a permanent site, including a manufactured (i.e. mobile) home on a permanent foundation, subject to Article VI, paragraph G, and a walled and roofed building in the course of construction, alteration or repair.
“Cancellation” means that ending of the insurance coverage provided by this policy prior to the expiration date.
“Coastal High Hazard Area” means an area subject to high velocity waters, including hurricane, wave wash and tsunamis.
“Condominium” means a system of individual ownership of units in a multi-unit building or in single-unit buildings as to which each unit owner in the condominium has an undivided interest in the common areas of the building(s) and facilities that serve the building(s).
“Declaration Page” is a computer generated summary of information furnished by you in the application for insurance. The declaration page also describes the term of the policy, limits of coverage, and displays the premium and our name. The declaration page is a part of this flood insurance policy.
“Direct Physical Loss By or From Flood” means any loss in the nature of actual loss of or physical damage evidenced by physical changes, to the insured property which is directly and proximately caused by a “flood” (as defined in this policy).
“Elevated Building” means a non-basement building which has its lowest elevated floor raised above ground level by foundation walls, shear walls, posts, piers, pilings or columns.
“Expiration Date” means the ending of the insurance coverage provided by this policy on the expiration date shown on the declaration page.
“Flood” means
A. A general and temporary condition of partial or complete inundation of normally dry land area
from:
1. The overflow of inland or tidal waves.
2. The unusual and rapid accumulation of runoff or surface waters from any source.
3. Mudslides (i.e. mudflows) which are proximately caused by flooding as defined in
subparagraphs A-2 above and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, including your premises, as when earth is carried by a current of water and deposited along the path of the current.B. The collapse or subsidence of land along the shore of a lake or other body of water as a result of erosion or undermining caused by waves or currents of water exceeding the cyclical levels which result in flooding as defined in a subparagraph A-1 above.
“Improvements” means fixtures, alterations, installations, or additions comprising a part of the insured building or condominium dwelling unit.
“Insured Property” shall mean property that becomes the subject matter of this insurance in strict accordance with the conditions of the Insuring Agreement as a result of the Insured becoming aware of or having reasonable suspicion that the Owner has failed to comply with the condition of the loan requiring the Owner to procure and maintain adequate flood insurance in respect of the building in which the Insured has a financial interest (hereinafter termed Lender Placed Property). Furthermore “Insured Property” shall mean property that becomes the subject matter of this insurance in strict accordance with the conditions of the Insuring Agreement as a result of the Insured’s financial interest in acquiring such property through a deed in lieu of foreclosure or repossession proceedings (hereinafter termed “REO”-Real Estate Owned or Foreclosed/Repossessed Property.)
“Manufactured Home” means a building transportable in one or more sections, which is built on a permanent chassis and designed to be used with or without a permanent foundation when connected to the required utilities. The term “manufactured home” does not include park trailers, travel trailers, motor homes, recreational and other similar vehicles. To be eligible for coverage under this policy a
manufactured home must be on a permanent foundation and, if located in a FEMA designated Special Hazard Area, must meet the requirements of paragraph G of Article VI.
“Mobile Home” means a manufactured home.
“National Flood Insurance Program” means the program of flood insurance coverage and floodplain management administered under the Act and applicable Federal regulations in Title 44 of the Code of Federal Regulations, Subchapter B.
“Owner” means the mortgagor or borrower of the Insured who has an interest in the property or the Insured when the property has been acquired through a deed in lieu of foreclosure, or repossession proceeding at the time of loss.
“Policy” means the entire written contract between you and us; it includes this printed form, the declaration page, any endorsement which may be issued and any renewal certificates indicating that coverage has been instituted for a new policy and policy term.
“Post-FIRM building” means a building for which the start of construction or substantial improvement occurred after, December 31, 1974, on or after the effective date of the initial Flood Insurance Rate Map (FIRM) for the community in which the building is located, whichever is later.
“Pre-FIRM rated building” means a building for which the start of construction or substantial improvement occurred on or before December 31, 1974, or before the effective date of the initial FIRM for the community in which the building is located, whichever is later.
“Regular Program Community” means community which is not a part of the Emergency Program within the NFIP and has completed a detailed engineering study for the community and a Flood Insurance Rate Map (FIRM) issued, the community is brought into the Regular Program of the NFIP. The community is required to adopt or amend its floodplain management regulations to incorporate the new flood data on the FIRM. Under the Regular Program, higher amounts of flood insurance coverage are provided than under the Emergency Program and new construction is charged actuarial rates for flood insurance that fully reflect the building’s risk of flooding.
“Residential Condominium Building” means a building owned by the members of a Condominium Association containing one or more residential units and in which at least 75% of the floor area within the building is residential.
“Special Flood Hazard Area” means an area having special flood, mudslide (i.e. mudflow) and/or floodrelated erosion hazards, and shown on a FHBM or FIRM as Zone A, AO, A 1-30, AE, A99, AH, AR, VO, V 1-3 0, VE, V, M or E.
“Unit” means a single family dwelling location within a condominium building.
“Walled and Roofed” means the building has in place two or more exterior rigid walls and the roof is fully secured so that the building will resist flotation, collapse and lateral movement.
We hope this flood insurance glossary is useful to you when navigating your policy. If you have any questions feel free to contact us!