This topic covers property coverages outside the homeowners and commercial package policies: flood, inland and ocean marine, earthquake, and the residual market for property. The national guide explains the forms. This page covers the Delaware law and the federal flood program facts the Delaware exam uses: the FAIR Plan statute (18 Del. C. 4103 to 4109), private flood (4157 to 4158) and the NFIP.

The national concepts in brief

• Inland marine floaters cover movable property. Ocean marine covers hulls and cargo at sea.
• Earthquake is excluded from standard forms and is added by endorsement or a separate policy.
• Flood is excluded from homeowners and standard commercial forms.

Flood insurance (NFIP)

• Flood insurance is available to anyone living in a participating NFIP community.
• Mandatory purchase: properties in high-risk flood areas with a mortgage from a federally backed lender must carry flood insurance.
• Coverage limits (FEMA):

• Waiting period: typically 30 days. Exceptions include coverage bought in connection with a mortgage loan.
• Write Your Own: more than 47 private insurers sell and service NFIP policies.
• Delaware producers who write NFIP flood need a 2-hour flood course each CE biennium (Reg. 504).

Private flood in Delaware

• Before selling private flood, the producer must tell the consumer that the NFIP exists. NFIP coverage may be subsidized, and full-risk rates may apply if the consumer later returns to it (4157).
• Cancellation or nonrenewal of private flood, other than for nonpayment, requires at least 45 days' notice (4158).

Delaware FAIR Plan (18 Del. C. 4103 to 4109)

• Purpose: to stabilize the property market and make basic property insurance available for qualified property that can't get coverage in the normal market (4104).
• Basic property insurance means the perils of the standard fire policy and extended coverage endorsement (4103(1)).
• Qualified property must meet state law and local building codes, must not be combinable with other insured property, and must not violate public policy (4103(5)).
• Inspection: after a diligent effort in the normal market, the applicant may request an inspection by the inspection bureau (4105).
• Industry placement facility: authorized insurers set it up to distribute applications for inspected, qualified property fairly among themselves (4106).
• Joint underwriting association: would include every insurer writing fire and extended coverage directly, including in homeowners and commercial package policies (4108, 4109).

Exam traps

• NFIP residential limits are $250,000 / $100,000. Commercial limits are $500,000 / $500,000.
• The usual NFIP waiting period is 30 days.
• Private flood needs 45 days' notice to cancel or nonrenew for reasons other than nonpayment.