The Federal Emergency Management Agency today issued its long-awaited proposed rule to amend the Standard Flood Insurance Policy, representing the first substantive changes to the policy in more than two decades. The SFIP defines the coverage, limitations and exclusions for the National Flood Insurance Program flood insurance policies and includes terms and conditions that are unique to the NFIP.
Specifically, the proposed rule would replace the current Dwelling Policy Form used for one-to-four family residences with a new Homeowner Flood Form and five accompanying endorsements—increased cost of compliance coverage, actual cash value loss settlement, temporary housing expense, basement coverage and builder’s risk. These new endorsements would give homeowner policyholders the option of amending the Homeowner Flood Form to modify coverage with a commensurate adjustment to premiums charged.
In its rule, FEMA states that the new form and endorsements “would more closely align with property and casualty homeowners insurance and provide increased options and coverage in a more user-friendly and comprehensible format.” Comments on the proposal are due by April 8.