Flooding: Everyone is Exposed, Few are Insured, But New Options Entice
ADJUSTERSINTERNATIONAL.COM 11 Coverage for damage to building property Coverage for loss to business personal property Coverage for loss of income and extra expenses needed to resume operations Increased cost of compliance (covers added costs to elevate, floodproof, move or demolish a structure to comply with floodplain management rules) Increased cost— ordinance or law (covers added costs to bring undamaged parts of damaged structures property up to code) Primary or excess coverage Covered under a building property limit up to $500,000. Covered under a separate personal property limit up to $500,000. Not available Covered to $30,000 for “repetitive loss structures” that have sustained damage of at least half their value. Not available Almost always serves as primary flood coverage. Provides coverage under separate flood limits of insurance for property indicated in a schedule or the policy declarations. Same as above. Covered property in the open must be described in the accompanying schedule. Blanket or scheduled limits (per location) indicated on the schedule. Not addressed Coverage excluded within the CP 10 65. Coverage is primary in the absence of an NFIP policy or excess over an NFIP policy. Typically provides coverage under separate limits for loss due to flood and earthquake. Same as above Typically excluded in a DIC form but may become available for flood under a business income- extra expense form in a commercial package. Not addressed Coverage may be built into the policy or available by endorsement. Typically written on a “wrap around” basis to complement the base property policy. Difference in Conditions policy Topic NFIP Dwelling Policy ISOCommercial Property FloodEndorsement (CP1065 ) Covered under a single building and business personal property limit set by the insurer and applicable on a blanket or scheduled basis. Same as above. To be covered, personal property must be within an enclosed building at an insured location. Options for covering these losses: • Business income and extended business income; • Extra expenses to resume operations; • Loss of ingress and egress, including by order of civil authority; and • Increased period of restoration to comply with a building ordinance or law coverage (if covered) Choice of three optional limits: • Increased cost of construction • Demolition cost • Contingent loss assumption Available by endorsement Can be written as primary or excess, and on a “wrap around” basis. ISO Commercial Flood Program Comparing Potential Commercial Flood Options NOTE: For purposes of simplicity, all entries in the table are abridgements and/or paraphrases of policy provisions. Consult the actual policy provisions for definitive statements of coverage.
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