Our Solution
We think the best approach to reducing the increasing number of repetitive loss properties is to make a property that suffers a flood loss a better risk than it was before it flooded.
Rather than settle the loss the old fashion way, by indemnifying the policyholder, putting them back in the same condition they were in prior to a loss….why not offer insurance coverage that allow repairs with FEMA approved flood damage resistant materials, even if those materials costs more than the materials that were damaged.
“Flood [damage]-resistant material” is defined by the NFIP as “any building product [material, component or system] capable of withstanding direct and prolonged contact with floodwaters without sustaining significant damage.” The term “prolonged contact” means at least 72 hours, and the term “significant damage” means any damage requiring more than cosmetic repair. “Cosmetic repair” includes cleaning, sanitizing, and resurfacing (e.g., sanding, repair of joints, repainting) of the material. The cost of cosmetic repair should also be less than the cost of replacement of affected materials and systems. In addition to these requirements, individual materials that are considered flood damage-resistant must not cause degradation of adjacent materials or the systems of which the material is a part.
For example: instead of replacing damaged traditional paperfaced drywall with the same paperfaced drywall, why not replace that drywall with Nonpaperfaced Dens® Brand gypsum panels, manufactured by Georgia-Pacific Gypsum, that incorporates fiberglass mats instead of paper facings and complys with FEMA’s "Flood Damage Resistant Materials Requirements".
Or why not replace wood flooring with porcelain tile that looks almost exactly the same? Or, use magnesium oxide waterproof (and fire resistant) wallboard?
FloodReady is capable of making America’s homes more resilient one house at a time.
FloodReady Endorsement
This endorsement modifies insurance provided under the following:
PRIVATE MARKET FLOOD POLICY
I. The following coverage is added to COVERAGE C – OTHER COVERAGES:
Flood Damage – Resistant Materials Coverage
a. Provided that you meet the primary residence insurance condition set forth in this endorsement, we will pay the increased cost to replace damaged finish materials used in the construction of floors, walls and ceilings that sustain direct physical loss by or from flood with flood damage resistant materials.
b. Subject to a maximum of $10,000 per event, we will pay up to:
i. $5,000 per event for the additional cost for such flood damage resistant materials used to replace such damaged finish materials with respect to that section of flooring that sustains direct physical loss by or from flood, and
ii. $5,000 per event for the additional cost for such flood damage resistant materials used to replace such damaged finish materials with respect to that section of the walls or ceilings that sustains direct physical loss by or from flood,
but in no event shall we pay more than twice the value per square foot of materials of like kind and quality at the time and place of the loss that would have been used to repair or replace such damaged flooring, walls or ceilings.
c. With respect to a basement, this coverage is limited to walls and ceilings (not including flooring) and subject to the terms and conditions set forth herein, the replacement with such flood damage resistant materials in a basement includes the cost of labor to nail it, unfinished and un-floated and not taped, to the framing.
d. If any coverage provided herein is also required by an applicable State or local floodplain management law and is also covered under Coverage D – Increased Cost of Compliance, then such coverage shall be first provided under Coverage D – Increased Cost of Compliance and then the remaining amount, if any, shall be payable under this coverage, subject to the terms and conditions set forth herein.
e. This coverage does not increase the Coverage A or Coverage B limit of liability. No additional deductible applies to this coverage.
II. All of the definitions of this policy apply to this endorsement. However, the following definitions apply to this endorsement and supersede any similar definitions of this policy to the contrary:
1. Cosmetic repair means repair of a cosmetic nature including, but not limited to, cleaning, sanitizing, and resurfacing (such as, sanding, repair of joints and repainting) of the material.
2. Finish materials means all coverings, finishes, and elements that do not provide structural support or rigidity to a building or building component.
3. Flood damage resistant materials means any building product, material, component or system capable of withstanding direct and prolonged contact with floodwaters without sustaining significant damage.
4. Primary residence insurance condition means a single-family dwelling that:
a. Is your principal residence meaning that, at the time of loss, you or your spouse lived there for at least 80% of:
i. The 365 days immediately preceding the loss; or
ii. The period of your ownership, if you owned such dwelling for less than 365 days and
b. At the time of loss, the amount of insurance in this policy that applies to such dwelling is 80% or more of its full replacement cost immediately before the loss, or is the maximum amount of insurance available under the NFIP.
5. Prolonged contact means contact with floodwaters of at least 72 hours.
6. Significant damage means any damage requiring more than cosmetic repair.