FEMA has published a memorandum announcing changes to the NFIP Flood Insurance Manual that will become effective October 1, 2018. Examples of changes applicable to new business, renewals, endorsements, and cancellations include:
Establishment of Cancellation Reason Code 26 for Duplicate Coverage
FEMA created a reason code to allow cancellation of an NFIP policy when an insured has obtained a duplicate policy, for building coverage on the same building, from sources other than the NFIP.
Required Notification of Preferred Risk Policy Eligibility for Certain Cancellation Reasons
FEMA is requiring NFIP insurers to inform eligible policyholders covered by standard-rated policies for properties in non-Special Flood Hazard Areas (SFHA) of their opportunity to convert to the Preferred Risk Policy. Insurers must do so prior to processing cancellations for various cancellation reasons mentioned in the announcement.
While FEMA is granting NFIP insurers the ability to develop their own notice requirements, insurers must be able to prove that they did inform policyholders as required.
Extended Eligibility for Newly Mapped Rating Procedure
FEMA is extending the time to use the Newly Mapped rating procedure for properties newly mapped into an SFHA in lieu of immediately moving to a full-risk rating.
On or after October 1, 2018, properties newly mapped into an SFHA are eligible if the applicant obtains coverage that is effective either:
- within 12 months of the map revision date or;
- within 45 days of initial lender notification if the notification occurred within 24 months of the map revision date
For complete details, please review Memorandum W-18008 .