Some property exposures fall outside homeowners, dwelling and commercial property forms: flood, earthquake, property that moves, ships and cargo, crops and farms, cyber losses, and owners the regular market will not insure. This guide covers those "other" property coverages: the National Flood Insurance Program, difference in conditions, inland and ocean marine, floaters, farm and crop coverage, first-party cyber, and residual market plans such as FAIR plans.

National Flood Insurance Program (NFIP)

Standard property forms exclude flood, so flood coverage comes from the federal NFIP (run by FEMA) or a private flood insurer.

• Who can buy: only owners in participating communities, which must adopt and enforce floodplain management rules (42 U.S.C. 4012(c)). A community first joins the Emergency Program, with lower limits, before the Regular Program.
• Write Your Own: private insurers sell and service NFIP policies under their own names while the federal government bears the risk (44 CFR 62.23).
• Mandatory purchase: the Flood Disaster Protection Act of 1973 requires flood insurance on buildings in Special Flood Hazard Areas financed by federally regulated or insured lenders (42 U.S.C. 4012a).
• Definition of flood (Standard Flood Insurance Policy): a general and temporary condition of partial or complete inundation of two or more acres of normally dry land or two or more properties (at least one the insured's) from overflow of waters, unusual and rapid accumulation of surface water, mudflow, or related shoreline collapse.
• Forms: the Dwelling Form, the General Property Form, and the Residential Condominium Building Association Policy (RCBAP).

Regular Program limits (44 CFR 61.6)

Key SFIP rules

• Waiting period: 30 days for a new policy (42 U.S.C. 4013(c); 44 CFR 61.11). Exceptions: coverage bought in connection with making, increasing, extending or renewing a loan takes effect at the loan transaction; purchases within 13 months after a map revision that puts a building in a special flood hazard area have a 1-day wait.
• Loss settlement (Dwelling Form): a single-family principal residence insured to at least 80% of replacement cost (or the maximum available) is paid at replacement cost; other buildings at ACV; contents always at ACV.
• Basements and areas below the lowest elevated floor: coverage is limited to listed items, such as furnaces, water heaters and freezers.
• Increased Cost of Compliance: up to $30,000 to elevate, floodproof, relocate or demolish a substantially or repetitively damaged building to meet floodplain rules.
• Loss avoidance: up to $1,000 for sandbags, supplies and labor to protect the building when flood threatens.
• Proof of loss: within 60 days after the loss, unless FEMA extends it. Suit: in federal district court within 1 year of the written denial (42 U.S.C. 4072).
• Pricing: under Risk Rating 2.0, effective for new policies October 1, 2021 and all renewals from April 1, 2022, premiums reflect each building's own flood risk (flood frequency and types, distance to water, elevation, cost to rebuild). The Community Rating System discounts premiums in communities whose floodplain management exceeds NFIP minimums.

Difference in conditions (DIC)

A DIC policy is an open-perils policy that supplements a commercial insured's primary property coverage, most often to add flood and earthquake and fill other gaps.

Earthquake

Earth movement is excluded from standard property forms. Coverage comes by endorsement (for example ISO HO 04 54 on a homeowners policy, CP 10 40 on commercial property) or a separate policy, usually with a percentage deductible. The homeowners endorsement treats quakes within 72 hours as one earthquake and still excludes flood or tsunami caused by the quake.

Inland marine and floaters

• Inland marine covers property in transit over land, movable property, property in the care of bailees, and instrumentalities of transportation and communication such as bridges, tunnels, piers, pipelines, power lines and radio and TV towers (NAIC glossary). The Nationwide Marine Definition describes the property that may be written as marine insurance.
• Commercial examples: contractors equipment floater (tools and equipment that move between job sites), motor truck cargo and transit coverage, bailees' customers (customers' goods in a dry cleaner's care, often regardless of liability), jeweler's block, accounts receivable and valuable papers.
• Floaters follow movable property wherever it goes. A personal articles floater schedules valuables such as jewelry, furs, fine arts, cameras and musical instruments, each with a stated value, against all physical loss subject to listed exclusions. The homeowners Scheduled Personal Property endorsement (HO 04 61) does the same job and is often called a personal articles floater. A reason to schedule jewelry: the HO-3 caps theft of jewelry at $1,500.
• Under the ISO Commercial Inland Marine Conditions (CM 00 01), property is valued at the least of ACV, the cost to restore, or the cost to replace; the insurer gives notice of its intentions within 30 days of the sworn proof of loss; the parts condition pays only for the lost part.

Ocean marine

• Hull covers the vessel; cargo covers the goods (often warehouse to warehouse); freight covers the shipowner's earnings; protection and indemnity (P&I) covers the owner's liability.
• General average: a sacrifice for the common safety (cargo thrown overboard to save the ship) is shared by all parties to the voyage. Particular average falls only on the owner of the damaged interest. Jettison is throwing cargo overboard; barratry is a wrongful act by the master without the owner's connivance; perils of the sea include sinking, stranding and heavy weather.
• Implied warranties: seaworthiness at the start of the voyage, no unreasonable deviation, and legality of the venture.

Farm and crop coverage

• ISO farm program: property Coverages A (farm dwelling), B (other private structures), C (household personal property), D (loss of use), E (scheduled farm personal property), F (unscheduled farm personal property) and G (barns, silos and other farm structures); liability Coverages H (bodily injury and property damage), I (personal and advertising injury) and J (medical payments). Separate forms cover livestock and mobile agricultural machinery and equipment such as tractors and combines.
• Multiple-peril crop insurance is reinsured and subsidized by the federal government through the Federal Crop Insurance Corporation and sold by approved private insurers (7 U.S.C. 1508). Crop-hail insurance covers growing crops against hail and certain other named perils.

Mobile homes

Mobile (manufactured) home policies are adapted homeowners forms covering the home, its contents and personal liability.

First-party cyber

Most commercial property and liability policies do not cover cyber risks (NAIC). First-party cyber coverage protects the business's own losses: forensic investigation, customer notification and call centers, data restoration, business interruption after an attack, and cyber extortion (ransomware). Payments to consumers and lawsuits are third-party coverage. Cyber can be bought stand-alone or in a package.

Residual market property plans

• FAIR plans (Fair Access to Insurance Requirements) are state pools, run as government and insurance industry cooperative programs, that make basic property insurance available to owners who cannot obtain it through conventional means. They address availability, not a below-market price. The federal FAIR plan provisions of the 1968 housing act (12 U.S.C. 1749bbb-3 et seq.) terminated September 30, 1985, and not every state has a FAIR plan.
• Beach and windstorm plans provide wind coverage for coastal properties the voluntary market will not write (North Carolina's coastal plan is one example).

Common traps

• NFIP: 30-day wait, except loan closings (no wait) and post-map-revision purchases (1 day).
• Residential limits $250,000 building / $100,000 contents; non-residential $500,000 each.
• NFIP contents are always ACV.
• General average is shared by everyone; hull is the ship, not the cargo.
• A personal articles floater is inland marine.
• FAIR plans are state programs and do not exist everywhere.