National Flood Insurance Program

Summary: The General Property Form is available through the National Flood Insurance Program (NFIP). The NFIP falls under the Federal Emergency Management Agency (FEMA) Federal Insurance Administration. There are three standard policies used for writing flood insurance under the NFIP: Dwelling, General Property, and Residential Condominium Building Association policies. 

The General Property form is the only one of the forms that may be used to insure commercial enterprises, such as a nonresidential condominium building or a mercantile or manufacturing concern. It may also be used to insure a residential condominium not qualifying for the regular program, or personal property in a unit in a nonresidential condominium building.

Coverage is on an actual cash value basis with no applicable coinsurance. Replacement cost is not available.

Topics covered:
Introduction
Insuring agreement
Definitions
Covered building property
Covered personal property
Other coverages
Property not covered
Exclusions
Deductibles
General conditions
Loss settlement provisions
Liberalization clause; what law governs

Introduction

The NFIP General Property Form may be used to insure residential buildings with five or more units and owners or lessees of nonresidential buildings or units. Cooperative buildings—where the entire building is in the name of the cooperative—time sharing buildings not in the condominium form of ownership, and condominiums that do not meet Residential Condominium Building Association Policy (RCBAP) requirements, may be written on the General Property Form. Eligible condominiums include those buildings in emergency program communities and those without at least 75 percent floor area used for residential purposes. The form may also be used for commercial condominiums and their commonly owned contents and for commercial condominium unit owners.

The Biggert-Waters Flood Insurance Reform Act of 2012 allowed for an increase in maximum building coverage for non-condominium residential buildings designed for use for five or more families (also known as other residential buildings) from $250,000 to $500,000, effective June 2014. The maximum content coverage for policies covering other residential buildings remained at $100,000 per policy. The limit of coverage available for a condo, timeshare, or other commercial building is $500,000 ($500,000 contents) in the regular program, and for buildings in the emergency program the limit is $100,000 ($100,000 contents). Nonresidential unit owners' contents may be insured for $500,000 in the regular program and $100,000 in the emergency program.

This form can also be used to insure such property as silos and grain storage buildings, cisterns, and buildings built entirely over water, if constructed prior to October 1, 1982. (These must be submitted for a rate.) Boathouses built partially over water—the portions of the building not used for boathouse purposes—may be insured, so long as the building is partially over land and also used for residential, commercial, or municipal purposes, and is eligible for flood coverage.

The form can also be used to insure stock, machinery, furniture and fixtures, and other property used in an insured's business. This is not to say all stock is covered. Autos and motorcycles, notably, cannot be insured on the general property form.

It is important to note that, while the general property form does not contain a coinsurance provision, neither does it provide replacement cost coverage for either building or contents. Loss settlement is strictly on an actual cash value (replacement less depreciation, not including any antique value) basis.

Insuring Agreement

Before the insuring agreement, the form states the following:

This policy provides no coverage:

1.in a regular program community, for a residential condominium building, as defined in this policy; and

2.except for personal property coverage, for a unit in a condominium building.

Analysis

The form makes clear that the form is not designed for residential condos in a regular program community and for units in a condo building, except for personal property.