DEFINITIONS

DEF 1 OctOber 1, 2011

This list of terms is intended to include those that have specific meaning to the National Flood Insurance Program

(NFIP). In a few instances, standard industry terms have been added for additional focus and emphasis.

DEFINITIONS

Act. The National Flood Insurance Act of 1968 and any

amendments to it.

Actual Cash Value (ACV). The cost to replace an

insured item of property at the time of loss, less the

value of its physical depreciation.

Adjuster Control Office. An NFIP claims office similar

to a Flood Insurance Claims Office (FICO) with the

exception that the Adjuster Control Office does not

house insured files, maintain a claims examiner staff

at the site, or issue claim payments.

Alternative Rating. A rating method used when a

building is Pre-FIRM, the Flood Insurance Rate Map

(FIRM) zone is unknown, and the community in which

the building is located has no V Zones. May also be

used for renewal of policies in communities that have

converted from the Emergency Program to the Regular

Program during a policy’s term.

Anchored. Adequately secured to prevent flotation,

collapse, or lateral movement.

Application. The statement made and signed by

the prospective policyholder or the agent/producer

in applying for an NFIP flood insurance policy. The

Application gives information used to determine the

eligibility of the risk, the kind of policy to be issued,

and the correct premium payment. The Application is

part of the flood insurance policy. For a policy to be

issued, the correct premium payment must accompany

the Application.

Appurtenant Structure. A detached garage servicing a

1–4 family dwelling.

Assignment. The transfer by a policyholder of his/her

legal right or interest in a policy contract to a third party.

In the NFIP, written assignment of a policy is permissible

upon transfer of title, without the consent of the FEMA,

except in the case where a residential (household)

contents-only policy is involved or a policy was issued to

cover a building in the course of construction.

Base Flood. A flood having a 1% chance of being equaled

or exceeded in any given year.

Base Flood Depth (BFD). The depth shown on the Flood

Insurance Rate Map (FIRM) for Zone AO that indicates

the depth of water above highest adjacent grade

resulting from a flood that has a 1% chance of equaling

or exceeding that level in any given year.

Base Flood Elevation (BFE). The elevation of surface

water resulting from a flood that has a 1% chance of

equaling or exceeding that level in any given year. The

BFE is shown on the Flood Insurance Rate Map (FIRM)

for zones AE, AH, A1–A30, AR, AR/A, AR/AE, AR/A1–

A30, AR/AH, AR/AO, V1–V30, and VE.

Basement. Any area of the building, including any sunken

room or sunken portion of a room, having its floor below

ground level (subgrade) on all sides.

Binder or Certificate of Insurance. A temporary agreement

between company, agent/producer, and insured that the

policy is in effect. The NFIP does not recognize binders.

However, for informational purposes only, the NFIP

recognizes Certificates of Insurance and similar forms

for renewal policies.

Blanket Insurance. A single amount of insurance applying

to more than 1 building and/or contents. Blanket

insurance is not permitted under the NFIP.

Breakaway Wall. A wall that is not part of the structural

support of a building and is intended through its design

and construction to collapse under specific lateral

loading forces, without causing damage to the elevated

portion of the building or supporting foundation system.

Building.

• A structure with 2 or more outside rigid walls and

a fully secured roof, that is affixed to a permanent

site; or

• A manufactured home (a “manufactured home,”

also known as a mobile home, is a structure built

on a permanent chassis, transported to its site in

1 or more sections, and affixed to a permanent

foundation); or

• A travel trailer without wheels, built on a chassis and

affixed to a permanent foundation, that is regulated

under the community’s floodplain management and

building ordinances or laws.

“Building” does not mean a gas or liquid storage tank

or a recreational vehicle, a park trailer, or other similar

vehicle, except as described above.

Building in the Course of Construction. A walled and

roofed building (see the General Rules section for

exception) that is principally above ground and affixed

to a permanent site. It does not include building

materials or supplies intended for use in construction,

alteration, or repair unless such materials or supplies

are within an enclosed building on the premises.

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DEF 2 May 1, 2011

Cancellation. The termination of the insurance

coverage provided by a policy before the expiration

date.

Cistern. Covered cisterns and the water in them are

defined as an integral part of an insurable building,

meaning under the building or above ground and

physically attached to a side of the building with 1 of

the walls of the building and cistern being common to

each other.

Claims Coordinating Office (CCO). A clearinghouse

for the various insurers who are responding to a multi-

peril catastrophe. Through voluntary participation, all

losses are reported to the CCO and are processed to

locate address matches among the reported claims.

The interest of each carrier is protected as the Claims

Coordinator maintains sole control over the policy and

loss information. If a match is found, special care is

taken to direct the assigned adjuster(s) to a mutually

agreeable adjustment or to have 1 adjuster surrender

his/her loss with the assurance that every effort will be

made to replace it.

Closed Basin Lake. A natural lake from which water

leaves primarily through evaporation and whose

surface area exceeds or has exceeded 1square mile

at any time in the recorded past. NFIP-insured buildings

that are subject to continuous lake flooding from a

closed basin lake are covered under the provisions of

Standard Flood Insurance Policy (SFIP).

Coastal Barrier. A naturally occurring island, sandbar,

or other strip of land, including coastal mainland, that

protects the coast from severe wave wash.

Coastal Barrier Improvement Act of 1990 (CBIA).

Enacted on November 16, 1990, the Act greatly

expanded the identified land in the Coastal Barrier

Resources System (CBRS) established pursuant to the

Coastal Barrier Resources Act (CBRA) of 1982.

Coastal Barrier Resources Act of 1982 (CBRA). For

the purposes of the NFIP, the CBRA of 1982 designated

certain portions of the Gulf Coast and East Coast as

undeveloped coastal barriers. These areas are shown

on appropriate flood insurance map panels and have

certain coverage restrictions.

Coastal Barrier Resources System (CBRS).

Communities, coastal barriers, and Otherwise

Protected Areas (OPAs) identified by the legislation

defined above.

Coastal High Hazard Areas. Special Flood Hazard

Areas (SFHAs) along the coasts that have additional

hazards due to wind and wave action. These areas are

identified on Flood Insurance Rate Maps (FIRMs) as

zones V, V1–V30, and VE.

Coinsurance. A penalty imposed on the loss payment

unless the amount of insurance carried on the

damaged building is at least 80% of its replacement

cost or the maximum amount of insurance available

for that building under the NFIP, whichever is less. Co-

insurance applies only to building coverage under the

Residential Condominium Building Association Policy

(RCBAP).

Community. A political entity that has the authority to

adopt and enforce floodplain ordinances for the area

under its jurisdiction.

Community Number. A 6-digit designation identifying

each NFIP community. The first 2 numbers are

the state code. The next 4 are the FEMA-assigned

community number. An alphabetical suffix is added to

a community number to identify revisions in the Flood

Insurance Rate Map (FIRM) for that community.

Community Rating System (CRS). A program developed

by FEMA to provide incentives for those communities

in the Regular Program that have gone beyond the

minimum floodplain management requirements to

develop extra measures to provide protection from

flooding.

Condominium. That form of ownership of real property

in which each unit owner has an undivided interest in

common elements.

Condominium Association. The entity made up of

the unit owners responsible for the maintenance and

operation of the following:

• Common elements owned in undivided shares by

unit owners

• Other real property in which the unit owners have

use rights;

where membership in the entity is a required condition

of unit ownership.

Contract Agent. An employee of a Write Your Own

(WYO) Company, or an agent/producer under written

contract with a WYO Company, empowered to act on

the company’s behalf and with authority to advise an

applicant for flood insurance that the company will

accept the risk.

Countywide Map. A Flood Insurance Rate Map

(FIRM) that shows flooding information for the entire

geographic area of a county, including the incorporated

communities within the county.

Crawlspace. An under-floor space that has its interior

floor area (finished or not) no more than 5 feet below

the top of the next-higher floor. Crawlspaces generally

have solid foundation walls. See Diagram 8 in the

Elevation Certificate Instructions.

DEF 3 May 1, 2011

Date of Construction. The date that the building permit

was issued, provided the actual start of construction,

repair, reconstruction, or improvement was within 180

days of the permit date.

Declarations Page. A computer-generated summary of

information provided by the prospective policyholder in

the application for flood insurance. The declarations

page also describes the term of the policy and the

limits of coverage and displays the premium and the

insurer’s name. The declarations page is a part of the

flood insurance policy.

Deductible Buyback. The option whereby, for an

additional premium, policyholders who wish to reduce

their deductibles from the standard deductibles of

$2,000 per building loss and per contents loss for Pre-

FIRM risks may purchase separate $1,000 deductibles

for building and contents coverages.

Described Location. The location where the insured

building or personal property is found. The described

location is shown on the declarations page.

Diagram Number. Any of the numbers used in the

instructions to the NFIP Elevation Certificate to identify

the diagrams of the main types of buildings.

Direct Physical Loss By or From Flood. Loss or damage

to insured property, directly caused by a flood. There

must be evidence of physical changes to the property.

Doublewide Manufactured (Mobile) Home. A

manufactured (mobile) home that, when assembled as

a nonmovable, permanent building, is at least 16 feet

wide and has an area within its perimeter walls of at

least 600 square feet.

Dwelling. A building designed for use as a residence

for no more than 4 families or a single-family unit in a

building under the condominium form of ownership.

Dwelling Form. See “Standard Flood Insurance Policy

(SFIP) – Dwelling Form.”

Elevated Building. A building that has no basement and

that has its lowest elevated floor raised above ground

level by foundation walls, shear walls, posts, piers,

pilings, or columns. Solid perimeter foundation walls

are not an acceptable means of elevating buildings in

V and VE Zones.

Emergency Program. The initial phase of a community’s

participation in the NFIP. During this phase, only limited

amounts of insurance are available under the Act.

Enclosure. That portion of an elevated building below

the lowest elevated floor that is either partially or fully

shut in by rigid walls.

Erosion. The collapse, undermining, or subsidence of

land along the shore of a lake or other body of water.

Erosion is a covered peril if it is caused by waves or

currents of water exceeding their cyclical levels which

result in flooding.

Federal Emergency Management Agency (FEMA). The

Federal agency under which the NFIP is administered.

In March 2003, FEMA became part of the newly created

U.S. Department of Homeland Security.

Federal Policy Fee. A flat charge that the policyholder

must pay on each new or renewal policy to defray

certain administrative expenses incurred in carrying

out the NFIP.

Financial Assistance/Subsidy Arrangement. The

arrangement between an insurance company and

FEMA to initiate the company’s participation in the

Write Your Own (WYO) Program. It establishes the

duties of the company and the government.

Finished (Habitable) Area. An enclosed area having

more than 20 linear feet of finished interior walls

(paneling, etc.) or used for any purpose other than

solely for parking of vehicles, building access, or

storage.

Flood.

• A general and temporary condition of partial or

complete inundation of 2 or more acres of normally

dry land area or of 2 or more properties (at least 1 of

which is the policyholder’s property) from:

Overflow of inland or tidal waters;

Unusual and rapid accumulation or runoff of

surface waters from any source; or

Mudflow; or

• Collapse or subsidence of land along the shore of a

lake or similar body of water as a result of erosion

or undermining caused by waves or currents of water

exceeding anticipated cyclical levels that result in a

flood as defined above.

Flood Hazard Boundary Map (FHBM). Official map of

a community issued by FEMA, where the boundaries of

the flood, mudflow, and related erosion areas having

special hazards have been designated.

Flood Insurance Claims Office (FICO). An NFIP claims

processing office set up in a catastrophe area when

a sufficient number of flood claims result from a

single event.

Flood Insurance Rate Map (FIRM). Official map of

a community on which FEMA has delineated the

Special Flood Hazard Areas (SFHAs), the Base Flood

Elevations (BFEs), and the risk premium zones

applicable to the community.

DEF 4 OctOber 1, 2011

Flood Response Office (FRO). The FRO provides

a local presence in an affected area and supports

the Write Your Own (WYO) Companies, the NFIP

Servicing Agent, and various Federal, state, and local

officials in providing answers to claims coverage

questions, forms for claims handling, and survey

and statistical input. One of the key requirements of

personnel at the FRO is to coordinate and conduct re-

inspections of WYO and NFIP Direct losses. The FRO

also tracks adjuster performance and provides such

information to interested WYO Companies and the

NFIP Servicing Agent.

Floodplain. Any land area susceptible to being

inundated by floodwaters from any source.

Floodplain Management. The operation of an overall

program of corrective and preventive measures for

reducing flood damage, including but not limited to

emergency preparedness plans, flood-control works,

and floodplain management regulations.

Floodproofing. Any combination of structural and

nonstructural additions, changes, or adjustments to

structures, which reduce or eliminate risk of flood

damage to real estate or improved real property,

water and sanitation facilities, or structures with their

contents.

Foundation Walls. Masonry walls, poured concrete

walls, or precast concrete walls that support the

weight of a building.

Freeboard. An additional amount of height above the

Base Flood Elevation (BFE) used as a factor of safety

(e.g., 2 feet above the Base Flood) in determining the

level at which a building’s lowest floor must be elevated

or floodproofed to be in accordance with state or

community floodplain management regulations.

General Property Form. See “Standard Flood Insurance

Policy (SFIP) – General Property Form.”

Grade Elevation. The lowest or highest finished ground

level that is immediately adjacent to the walls of the

building. Use natural (pre-construction), ground level, if

available, for Zone AO and Zone A (without BFE).

Grandfathering. An exemption based on circumstances

previously existing.

• Under NFIP statutory grandfathering, buildings

located in Emergency Program communities and Pre-

FIRM buildings in the Regular Program are eligible for

subsidized flood insurance rates.

• Under NFIP administrative grandfathering, Post-FIRM

buildings in the Regular Program built in compliance

with the floodplain management regulations in

effect at the start of construction will continue to

have favorable rate treatment even though higher

Base Flood Elevations (BFEs) or more restrictive,

greater risk zone designations result from Flood

Insurance Rate Map (FIRM) revisions. Policyholders

who have remained loyal customers of the NFIP by

maintaining continuous coverage (since coverage

was first obtained on the building) are also eligible

for administrative grandfathering.

Group Flood Insurance. Issued by the NFIP Direct

Program in response to a Presidential disaster

declaration. Disaster assistance applicants, in

exchange for a modest premium, receive a minimum

amount of building and/or contents coverage for a

3-year policy period. An applicant may cancel the group

policy at any time and secure a regular Standard Flood

Insurance Policy (SFIP) through the NFIP.

High-Rise Building. High-rise condominium buildings

have 5 or more units and at least 3 floors excluding

enclosure even if it is the lowest floor for rating

purposes. An enclosure below an elevated building,

even if it is the lowest floor for rating purposes, cannot

be counted as a floor to avoid classifying the building

as low rise. Under the NFIP, townhouses/rowhouses

are not considered high-rise buildings, regardless of

the number of floors.

Historic Building. Any building that is:

• Listed individually in the National Register of Historic

Places (a listing maintained by the Department of the

Interior) or preliminarily determined by the Secretary

of the Interior as meeting the requirements for

individual listing on the National Register; or

• Certified or preliminarily determined by the

Secretary of the Interior as contributing to the

historical significance of a registered historic

district or a district preliminarily determined by the

Secretary of the Interior to qualify as a registered

historic district; or

• Individually listed in a state inventory of historic places

in states with preservation programs that have been

approved by the Secretary of the Interior; or

• Individually listed on a local inventory of historic

places in communities with historic preservation

programs that have been certified either:

By an approved state program as determined by

the Secretary of the Interior; or

Directly by the Secretary of the Interior in states

without approved programs.

Improvements and Betterments. Fixtures, alterations,

installations, or additions made or acquired solely at

a tenant’s expense and comprising part of an insured

building.

Increased Cost of Compliance (ICC). Coverage for

expenses that a property owner must incur, above

and beyond the cost to repair the physical damage the

building actually sustained from a flooding event, to

DEF 5 OctOber 1, 2011

comply with mitigation requirements of state or local

floodplain management ordinances or laws. Acceptable

mitigation measures are elevation, floodproofing,

relocation, demolition, or any combination thereof.

Letter of Determination Review (LODR). FEMA’s ruling

on the determination made by a lender or third party

that a borrower’s building is in a Special Flood Hazard

Area (SFHA). A LODR deals only with the location of a

building relative to the SFHA boundary shown on the

Flood Insurance Rate Map (FIRM).

Letter of Map Amendment (LOMA). An amendment

to the currently effective FEMA map which establishes

that a property is not located in a Special Flood Hazard

Area (SFHA). A LOMA is issued only by FEMA.

Letter of Map Revision (LOMR). An official

amendment to the currently effective FEMA map. It is

issued by FEMA and changes flood zones, delineations,

and elevations.

Loss in Progress. A loss that is already in progress as

of 12:01 a.m. on the first day of the policy term; or,

as to any increase in the limits of coverage which is

requested, a loss that is already in progress when the

additional coverage is requested.

Lowest Adjacent Grade. The lowest point of the ground

level immediately next to a building.

Lowest Floor. The lowest floor of the lowest enclosed

area (including a basement). An unfinished or flood-

resistant enclosure, usable solely for parking of

vehicles, building access, or storage in an area other

than a basement area, is not considered a building’s

lowest floor provided that such enclosure is not built so

as to render the structure in violation of requirements.

Lowest Floor Elevation (LFE). The measured distance

of a building’s lowest floor above the National Geodetic

Vertical Datum (NGVD) or other datum specified on the

FIRM for that location.

Low-Rise Building. Low-rise condominium buildings

have fewer than 5 units regardless of the number

of floors or 5 or more units with fewer than 3 floors

including basement. All townhouses/rowhouses,

regardless of the number of floors or units, and all

single-family detached condominium buildings are

classified as low rise. An enclosure below an elevated

building, even if it is the lowest floor for rating purposes,

cannot be counted as a floor to avoid classifying the

building as low rise.

Mandatory Purchase. Under the provisions of the

Flood Disaster Protection Act of 1973, individuals,

businesses, and others buying, building, or improving

property located in identified areas of special flood

hazards within participating communities are required

to purchase flood insurance as a prerequisite for

receiving any type of direct or indirect Federal financial

assistance (e.g., any loan, grant, guaranty, insurance,

payment, subsidy, or disaster assistance) when the

building or personal property is the subject of or security

for such assistance.

Manufactured (Mobile) Home. A structure built on

a permanent chassis, transported to its site in 1 or

more sections, and affixed to a permanent foundation.

“Manufactured (mobile) home” does not include

recreational vehicles.

Manufactured (Mobile) Home Park or Subdivision,

Existing. A manufactured (mobile) home park or

subdivision for which the construction of facilities for

servicing the lots on which the manufactured (mobile)

homes are to be affixed (including, at a minimum, the

installation of utilities, the construction of streets,

and either final site grading or the pouring of concrete

pads) is completed on or before December 31, 1974,

or before the effective date of the community’s initial

Flood Insurance Rate Map (FIRM), whichever is later.

Manufactured (Mobile) Home Park or Subdivision,

Expansion to Existing Site. The preparation of

additional sites by the construction of facilities for

servicing the lots on which manufactured (mobile)

homes are to be affixed (including the installation of

utilities, the construction of streets, and either final

site grading or the pouring of concrete pads).

Manufactured (Mobile) Home Park or Subdivision,

New. A manufactured (mobile) home park or subdivision

for which the construction of facilities for servicing the

lots on which the manufactured (mobile) homes are to

be affixed (including, at a minimum, the installation of

utilities, the construction of streets, and either final site

grading or the pouring of concrete pads) is completed

after December 31, 1974, or on or after the effective

date of the community’s initial Flood Insurance Rate

Map (FIRM), whichever is later.

Map Revision. A change in the Flood Hazard Boundary

Map (FHBM) or Flood Insurance Rate Map (FIRM) for a

community which reflects revised zone, base flood, or

other information.

Masonry Walls. Walls constructed of individual

components laid in and bound together with mortar.

These components can be brick, stone, concrete

block, etc.

Modular Building. A building that is usually transported

to its site on a steel frame or special trailer because it

does not have a permanent chassis like a manufactured

(mobile) home. A modular building is classified and

rated under 1 of the other building types.

DEF 6 OctOber 1, 2011

Mortgage Portfolio Protection Program (MPPP). A

program designed to help lending institutions maintain

compliance with the Flood Disaster Protection Act

of 1973, as amended. Policies written under the

MPPP can be placed only through a Write Your Own

(WYO) Company.

Mudflow. A river of liquid and flowing mud on the

surfaces of normally dry land areas, as when earth is

carried by a current of water. Other earth movements,

such as landslide, slope failure, or a saturated soil mass

moving by liquidity down a slope, are not mudflows.

National Flood Insurance Program (NFIP). The

program of flood insurance coverage and floodplain

management administered under the Act and

applicable Federal regulations promulgated in Title 44

of the Code of Federal Regulations, Subchapter B.

National Geodetic Vertical Datum (NGVD) of 1929.

National standard reference datum for elevations,

formerly referred to as Mean Sea Level (MSL) of 1929.

NGVD 1929 may be used as the reference datum on

some Flood Insurance Rate Maps (FIRMs).

Natural Grade. The grade unaffected by construction

techniques such as fill, landscaping, or berming.

New Construction. Buildings for which the “start of

construction” commenced on or after the effective

date of an initial Flood Insurance Rate Map (FIRM) or

after December 31, 1974, whichever is later, including

any subsequent improvements.

NFIP Bureau and Statistical Agent. A corporation,

partnership, association, or any other organized entity

that contracts with FEMA to be the focal point of

support operations for the NFIP.

NFIP Servicing Agent. A corporation, partnership,

association, or any other organized entity that

contracts with FEMA to service insurance policies as

direct business.

NFIP Special Direct Facility (SDF). Formed in 2000,

a branch of the NFIP Servicing Agent to which Write

Your Own (WYO) Companies transfer renewals for

identified Severe Repetitive Loss (SRL) properties

so that mitigation assistance can be offered to the

policyholders.

North American Vertical Datum (NAVD) of 1988. The

vertical control datum established for vertical control

surveying in the United States of America based upon

the General Adjustment of the North American Datum

of 1988. It replaces the National Geodetic Vertical

Datum (NGVD) of 1929.

Non-Residential Building (including hotel/motel).

This is a commercial or non-habitational building,

or a mixed-use building that does not qualify as a

residential building. This category includes, but is

not limited to, small businesses, churches, schools,

farm buildings (including grain bins and silos), garages,

poolhouses, clubhouses, recreational buildings,

mercantile buildings, agricultural and industrial

buildings, warehouses, nursing homes, licensed bed-

and-breakfasts, and hotels and motels with normal

room rentals for less than 6 months.

Nullification. The act of declaring an insurance

contract invalid from its inception so that, from a legal

standpoint, the insurance contract never existed.

Other Residential Building. This is a residential

building that contains more than 4 apartments/units.

This category includes condominium and apartment

buildings as well as hotels, motels, tourist homes,

and rooming houses where the normal occupancy

of a guest is 6 months or more. These buildings are

permitted incidental occupancies. The total area of

incidental occupancy is limited to less than 25% of the

total floor area within the building. Examples of Other

Residential buildings include dormitories and assisted-

living facilities.

Otherwise Protected Areas (OPAs). Areas established

under Federal, state, or local law, or held by a qualified

organization, primarily for wildlife refuge, sanctuary,

recreational, or natural resource conservation

purposes. The only Federal spending prohibition within

OPAs is Federal flood insurance.

Out-As-Shown Determination. An alternative outcome

of the FEMA Letter of Map Amendment (LOMA) review

process stating that a specific property is located

outside the Special Flood Hazard Area (SFHA) as

indicated on the Flood Hazard Boundary Map (FHBM)

or Flood Insurance Rate Map (FIRM).

Participating Community. A community for which

FEMA has authorized the sale of flood insurance under

the NFIP.

Policy. The entire written contract between the insured

and the insurer. It includes the following:

• The printed policy form;

• The Application and declarations page;

• Any endorsement(s) that may be issued; and

• Any renewal certificate indicating that coverage has

been instituted for a new policy and new policy term.

Only 1 dwelling, specifically described by the

prospective policyholder in the Application, may be

insured under a policy.

Pollutants. Substances that include, but are not

limited to, any solid, liquid, gaseous, or thermal

irritant or contaminant, including smoke, vapor, soot,

fumes, acids, alkalis, chemicals, and waste. “Waste”

includes, but is not limited to, materials to be recycled,

reconditioned, or reclaimed.

DEF 7 OctOber 1, 2011

Ponding Hazard. A flood hazard that occurs in flat areas

when there are depressions in the ground that collect

“ponds” of water. The ponding hazard is represented

by the zone designation AH on the Flood Insurance

Rate Map (FIRM).

Post-FIRM Building. A building for which construction

or substantial improvement occurred after December

31, 1974, or on or after the effective date of an initial

Flood Insurance Rate Map (FIRM), whichever is later.

Pre-FIRM Building. A building for which construction

or substantial improvement occurred on or before

December 31, 1974, or before the effective date of an

initial Flood Insurance Rate Map (FIRM).

Preferred Risk Policy (PRP). A lower-cost Standard

Flood Insurance Policy (SFIP), written under the

Dwelling Form or General Property Form. It offers fixed

combinations of building/contents coverage limits

or contents-only coverage. The PRP is available for

property located in B, C, and X Zones in Regular Program

communities that meets eligibility requirements based

on the property’s flood loss history. It is also available

for buildings that are eligible under the 2-year PRP

Eligibility Extension.

Prepaid Amount (Total). The total amount that must

be submitted with an Application or renewal in order to

be acceptable for coverage. It is determined by adding

the Federal Policy Fee to the Total Prepaid Premium.

Prepaid Premium (Total). The amount on the Application

(excluding the Preferred Risk Policy [PRP] Application)

that includes the Annual Subtotal, the Increased Cost

of Compliance (ICC) Premium, the Community Rating

System (CRS) Premium Discount (if applicable), and

the Probation Surcharge (if applicable).

Presentment of Payment (Premium). The date of

the check or credit card payment by the applicant or

applicant’s representative if the premium payment is

not part of a loan closing, or the date of closing, if the

premium payment is part of a loan closing.

Principal Residence. A single-family dwelling in which,

at the time of loss, the named insured or the named

insured’s spouse has lived for either 80% of the 365

days immediately preceding the loss, or 80% of the

period of ownership, if less than 365 days.

Principally Above Ground Building. A building that has

at least 51% of its Actual Cash Value (ACV), including

machinery and equipment, above ground.

Probation. A FEMA-imposed change in a community’s

status resulting from violations and deficiencies in

the administration and enforcement of NFIP local

floodplain management regulations.

Probation Surcharge (Premium). A flat charge that the

policyholder must pay on each new or renewal policy

issued covering property in a community that the NFIP

has placed on probation under the provisions of 44

CFR 59.24.

Proper Openings – Enclosures (Applicable to Zones A,

A1–A30, AE, AO, AH, AR, and AR Dual). All enclosures

below the lowest elevated floor must be designed

to automatically equalize hydrostatic flood forces

on exterior walls by allowing for the entry and exit of

floodwaters. A minimum of 2 openings, with positioning

on at least 2 walls, having a total net area of not less

than 1 square inch for every square foot of enclosed

area subject to flooding must be provided. The bottom

of all openings must be no higher than 1 foot above the

higher of the exterior or interior grade (adjacent) or floor

immediately below the openings.

Property Removed to Safety Expense. Up to $1,000

of reasonable expenses incurred by the insured

to temporarily remove insured property from the

described location because of flood or the imminent

danger of flood.

Provisional Rating. A method for placing flood coverage

prior to the receipt of a FEMA Elevation Certificate.

Regular Program. The final phase of a community’s

participation in the NFIP. In this phase, a Flood

Insurance Rate Map (FIRM) is in effect and full limits of

coverage are available under the Act.

Regular Program Community. A community wherein a

Flood Insurance Rate Map (FIRM) is in effect and full

limits of coverage are available under the Act.

Repetitive Loss Structure. An NFIP-insured structure

that has had at least 2 paid flood losses of more than

$1,000 each in any 10-year period since 1978.

Replacement Cost Value (RCV). The cost to

replace property with the same kind of material and

construction without deduction for depreciation.

Residential Condominium Building. A building, owned

and administered as a condominium, containing 1 or

more family units and in which at least 75% of the floor

area is residential.

Residential Condominium Building Association

Policy (RCBAP). See “Standard Flood Insurance Policy

(SFIP) – Residential Condominium Building Association

Policy (RCBAP).”

Scheduled Building Policy. A policy that requires a

specific amount of insurance to be designated for each

building and its contents.

DEF 8 OctOber 1, 2011

Section 1316. Section of the National Flood Insurance

Act of 1968, as amended, which states that no new

flood insurance coverage shall be provided for any

property that FEMA finds has been declared by a duly

constituted state or local zoning authority or other

authorized public body to be in violation of state or

local laws, regulations, or ordinances that are intended

to discourage or otherwise restrict land development

or occupancy in floodprone areas.

Severe Repetitive Loss (SRL) Properties. NFIP-insured

buildings that, on the basis of paid flood losses since

1978, meet either of the loss criteria described in

the SRL section. SRL properties with policy effective

dates of January 1, 2007, and later will be afforded

coverage (new business or renewal) only through

the NFIP Servicing Agent’s Special Direct Facility

(SDF) so that they can be considered for possible

mitigation activities.

Shear Walls. Walls used for structural support but not

structurally joined or enclosed at the ends (except by

breakaway walls). Shear walls are parallel, or nearly

parallel, to the flow of the water and can be used in

any flood zone.

Sheet Flow Hazard. A type of flood hazard with flooding

depths of 1 to 3 feet that occurs in areas of sloping

land. The sheet flow hazard is represented by the zone

designation AO on the FIRM.

Single Adjuster Program. A procedure implemented

among the NFIP, various wind pools, and Write Your

Own (WYO) Companies to allow 1 adjuster to represent

both carriers in adjusting a combined wind-water loss

where the NFIP has the flood coverage and another

carrier has the wind coverage.

Single Building. A building that is separated from other

buildings by intervening clear space or solid, vertical,

load-bearing division walls.

Single-Family Residence. This is a residential single-

family building, or a dwelling unit in a non-residential

condominium building; incidental occupancies are

permitted if limited to less than 50% of the building’s

total floor area. Incidental occupancies are offices,

private schools, studios, or small service operations

within a residential building.

Solid Perimeter Foundation Walls. Walls that are used

as a means of elevating a building in A Zones and

that must contain sufficient openings to allow for the

unimpeded flow of floodwaters more than 1 foot deep.

Special Flood Hazard Area (SFHA). An area having

special flood, mudflow, or flood-related erosion

hazards, and shown on a Flood Hazard Boundary Map

(FHBM) or Flood Insurance Rate Map (FIRM) as Zone

A, AO, A1–A30, AE, A99, AH, AR, AR/A, AR/AE, AR/

AH, AR/AO, AR/A1–A30, V1–V30, VE, or V. For the

purpose of determining Community Rating System

(CRS) premium discounts, all AR and A99 Zones are

treated as non-SFHAs.

Split Level. A foundation with a vertical offset in the

floor framing on either side of a common wall.

Standard Flood Insurance Policy (SFIP) – Dwelling

Form. The policy form used to insure a building

designed for use as a residence for no more than 4

families or a single-family unit in a residential building

under a condominium form of ownership. This form is

also used to insure residential contents in any building.

The owner of a residential building with 5 or more units

can use this form to insure contents only in his or her

own residential unit.

Standard Flood Insurance Policy (SFIP) – General

Property Form. The policy form used to insure a non-

residential building or a 5-or-more-unit residential

building not eligible for the Residential Condominium

Building Association Policy (RCBAP). This form is also

used to insure non-residential contents in any building

or a building owner’s residential contents located in

multiple units within a building with 5 or more units.

Standard Flood Insurance Policy (SFIP) – Residential

Condominium Building Association Policy (RCBAP).

The policy form used to insure a building, owned and

administered as a condominium, containing 1 or more

units and in which at least 75% of the floor area is

residential. The building must be located in a Regular

Program community.

Start of Construction. For other than new construction

or substantial improvements, under the Coastal

Barrier Resources Act (CBRA), this is the date when

the building permit was issued, provided that the

actual start of construction, repair, rehabilitation,

addition, placement, or other improvement was within

180 days of the permit date. The actual start means

either the first placement of permanent construction

of a building on site, such as the pouring of a slab

or footing, the installation of piles, the construction of

columns, or any work beyond the stage of excavation;

or the placement of a manufactured (mobile) home on

a foundation. For a substantial improvement, actual

start of construction means the first alteration of any

wall, ceiling, floor, or other structural part of a building,

whether or not that alteration affects the external

dimensions of the building.

Stock. Merchandise held in storage or for sale, raw

materials, and in-process or finished goods, including

supplies used in their packing or shipping. “Stock” does

not include any property not covered under “Section IV.

Property Not Covered” of the General Property Form,

except the following:

• Parts and equipment for self-propelled vehicles;

DEF 9 OctOber 1, 2011

• Furnishings and equipment for watercraft;

• Spas and hot tubs, including their equipment; and

• Swimming pool equipment.

Subgrade Crawlspace. A crawlspace foundation where

the subgrade under-floor area is no more than 5 feet

below the top of the next-higher floor and no more than

2 feet below the lowest adjacent grade on all sides.

Submit-for-Rate (SFR). An application for flood

insurance on a building for which no risk rate is

published in the NFIP Flood Insurance Manual.

Insurance coverage can be obtained only after

the insurer has approved the application and has

established the risk premium rate.

Substantial Damage. Damage of any origin sustained

by a building whereby the cost of restoring the building

to its before-damaged condition would equal or exceed

50% of the market value of the building before the

damage occurred.

Substantial Improvement. Any reconstruction,

rehabilitation, addition, or other improvement of a

building, the cost of which equals or exceeds 50%

of the market value of the building before the “start

of construction” of the improvement. Substantial

improvement includes buildings that have incurred

“substantial damage,” regardless of the actual repair

work performed. The term does not, however, include

either any project for improvement of a building to

correct existing state or local code violations or any

alteration to a “historic building,” provided that the

alteration will not preclude the building’s continued

designation as a “historic building.”

Suspension. FEMA’s removal of an NFIP participating

community from the Program because the community

has not enacted and/or enforced the proper floodplain

management regulations required for participation.

Tentative Rates. NFIP rates used to issue policies

for applications that fail to provide the NFIP with valid

actuarial rating information.

Travel Trailer. Under the NFIP, a travel trailer can be

considered a building only if it is without wheels, built

on a chassis and affixed to a permanent foundation,

and regulated under the community’s floodplain

management and building ordinances or laws.

2–4 Family Residence. This is a residential building

that contains 2–4 units. This category includes

apartment buildings and condominium buildings.

Incidental occupancies are permitted if the total area

of such occupancies is limited to less than 25% of

the total floor area within the building. This excludes

hotels and motels with normal room rentals for less

than 6 months.

Underground Building. A building for which 50%

or more of the Actual Cash Value (ACV), including

machinery and equipment that are part of the building,

is below ground.

Unfinished Area. An enclosed area that is used only

for the parking of vehicles, building access, or storage

purposes and that does not meet the definition of

a finished (habitable) area. Drywall used for fire

protection is permitted in unfinished areas.

Unit. A unit owned by the policyholder in a condominium

building.

Valued Policy. A policy in which the insured and the

insurer agree on the value of the property insured,

that value being payable in the event of a total loss.

The Standard Flood Insurance Policy (SFIP) is not a

valued policy.

Variance. A grant of relief by a participating

community from the terms of its floodplain

management regulations.

Waiting Period. The time between the date of

application and the policy effective date.

Walled and Roofed. A building that has 2 or more

exterior rigid walls and a fully secured roof and that is

affixed to a permanent site.

Wave Height Adjustment. A measurement that is

added to the Base Flood Elevation (BFE) for V Zones

shown on the Flood Insurance Rate Map (FIRM)

published prior to 1981. For coastal communities,

the BFE shown on FIRMs published prior to 1981 are

stillwater elevations, which include only the effects

of tide and storm surge, and not the height of wind-

generated waves.

Write Your Own (WYO) Program. A cooperative

undertaking of the insurance industry and FEMA

begun in October 1983. The Write Your Own (WYO)

Program operates within the context of the NFIP and

involves private insurance carriers that issue and

service NFIP policies.

Zone. A geographical area shown on a Flood Hazard

Boundary Map (FHBM) or a Flood Insurance Rate Map

(FIRM) that reflects the severity or type of flooding in

the area.