42 USC 4013 - Nature and limitation of insurance coverage

U.S Code last checked for updates: Jan 18, 2026

§ 4013.

Nature and limitation of insurance coverage

(a)

Regulations respecting general terms and conditions of insurability

The Administrator shall from time to time, after consultation with the advisory committee authorized under section 4025 of this title, appropriate representatives of the pool formed or otherwise created under section 4051 of this title

(1)

the types, classes, and locations of any such properties which shall be eligible for flood insurance;

(2)

the nature and limits of loss or damage in any areas (or subdivisions thereof) which may be covered by such insurance;

(3)

the classification, limitation, and rejection of any risks which may be advisable;

(4)

appropriate minimum premiums;

(5)

appropriate loss-deductibles; and

(6)

any other terms and conditions relating to insurance coverage or exclusion which may be necessary to carry out the purposes of this chapter.

(b)

Regulations respecting amount of coverage

In addition to any other terms and conditions under subsection (a), such regulations shall provide that—

(1)

any flood insurance coverage based on chargeable premium rates under section 4015 of this title which are less than the estimated premium rates under section 4014(a)(1) of this title shall not exceed—

(A)

in the case of residential properties—

(i)

$35,000 aggregate liability for any single-family dwelling, and $100,000 for any residential structure containing more than one dwelling unit,

(ii)

$10,000 aggregate liability per dwelling unit for any contents related to such unit, and

(iii)

in the States of Alaska and Hawaii, and in the Virgin Islands and Guam; the limits provided in clause (i) of this sentence shall be: $50,000 aggregate liability for any single-family dwelling, and $150,000 for any residential structure containing more than one dwelling unit;

(B)

in the case of business properties which are owned or leased and operated by small business concerns, an aggregate liability with respect to any single structure, including any contents thereof related to premises of small business occupants (as that term is defined by the Administrator), which shall be equal to (i) $100,000 plus (ii) $100,000 multiplied by the number of such occupants and shall be allocated among such occupants (or among the occupant or occupants and the owner) under regulations prescribed by the Administrator; except that the aggregate liability for the structure itself may in no case exceed $100,000; and

(C)

in the case of church properties and any other properties which may become eligible for flood insurance under section 4012 of this title—

(i)

$100,000 aggregate liability for any single structure, and

(ii)

$100,000 aggregate liability per unit for any contents related to such unit; and

(2)

in the case of any residential building designed for the occupancy of from 1 to 4 families for which the risk premium rate is determined in accordance with the provisions of section 4014(a)(1) of this title, additional flood insurance in excess of the limits specified in clause (i) of subparagraph (A) of paragraph (1) shall be made available, with respect to any single such building, up to an aggregate liability (including such limits specified in paragraph (1)(A)(i)) of $250,000;

(3)

in the case of any residential property for which the risk premium rate is determined in accordance with the provisions of section 4014(a)(1) of this title, additional flood insurance in excess of the limits specified in clause (ii) of subparagraph (A) of paragraph (1) shall be made available to every insured upon renewal and every applicant for insurance so as to enable any such insured or applicant to receive coverage up to a total amount (including such limits specified in paragraph (1)(A)(ii)) of $100,000;

(4)

in the case of any nonresidential building, including a church, for which the risk premium rate is determined in accordance with the provisions of section 4014(a)(1) of this title, additional flood insurance in excess of the limits specified in subparagraphs (B) and (C) of paragraph (1) shall be made available with respect to any single such building, up to an aggregate liability (including such limits specified in subparagraph (B) or (C) of paragraph (1), as applicable) of $500,000, and coverage shall be made available up to a total of $500,000 aggregate liability for contents owned by the building owner and $500,000 aggregate liability for each unit within the building for contents owned by the tenant; and

(5)

any flood insurance coverage which may be made available in excess of the limits specified in subparagraph (A), (B), or (C) of paragraph (1), shall be based only on chargeable premium rates under section 4015 of this title, which are not less than the estimated premium rates under section 4014(a)(1) of this title, and the amount of such excess coverage shall not in any case exceed an amount equal to the applicable limit so specified (or allocated) under paragraph (1)(C), (2), (3), or (4), as applicable.

(c)

Effective date of policies

(1)

Waiting period

(2)

Exception

The provisions of paragraph (1) shall not apply to—

(A)

the initial purchase of flood insurance coverage under this chapter when the purchase of insurance is in connection with the making, increasing, extension, or renewal of a loan;

(B)

the initial purchase of flood insurance coverage pursuant to a revision or updating of floodplain areas or flood-risk zones under section 4101(f) of this title, if such purchase occurs during the 1-year period beginning upon publication of notice of the revision or updating under section 4101(h) of this title; or

(C)

the initial purchase of flood insurance coverage for private property if—

(i)

the Administrator determines that the property is affected by flooding on Federal land that is a result of, or is exacerbated by, post-wildfire conditions, after consultation with an authorized employee of the Federal agency that has jurisdiction of the land on which the wildfire that caused the post-wildfire conditions occurred; and

(ii)

the flood insurance coverage was purchased not later than 60 days after the fire containment date, as determined by the appropriate Federal employee, relating to the wildfire that caused the post-wildfire conditions described in clause (i).

(d)

Optional high-deductible policies for residential properties

(1)

Availability

(2)

Disclosure

(A)

Form

(B)

Information

The information described in this subparagraph is—

(i)

information sufficient to inform the applicant of the availability of the coverage option required by paragraph (1) to applicants for flood insurance coverage; and

(ii)

a statement explaining the effect of a loss-deductible and that, in the event of an insured loss, the insured is responsible out-of-pocket for losses to the extent of the deductible selected.

(Pub. L. 90–448, title XIII, § 1306, Aug. 1, 1968, 82 Stat. 575; Pub. L. 92–213, § 2(c)(2), Dec. 22, 1971, 85 Stat. 775; Pub. L. 93–234, title I, § 101, Dec. 31, 1973, 87 Stat. 977; Pub. L. 95–128, title VII, § 704(a), Oct. 12, 1977, 91 Stat. 1145; Pub. L. 98–181, title I [title IV, § 451(d)(1)], Nov. 30, 1983, 97 Stat. 1229; Pub. L. 100–242, title V, § 544(a), Feb. 5, 1988, 101 Stat. 1940; Pub. L. 100–628, title X, § 1086(a), Nov. 7, 1988, 102 Stat. 3278; Pub. L. 100–707, title I, § 109(o), Nov. 23, 1988, 102 Stat. 4709; Pub. L. 101–137, § 1(c), Nov. 3, 1989, 103 Stat. 824; Pub. L. 101–508, title II, § 2302(d), Nov. 5, 1990, 104 Stat. 1388–23; Pub. L. 103–325, title V, §§ 552(a), 573, 579(a), Sept. 23, 1994, 108 Stat. 2269, 2278, 2284; Pub. L. 112–141, div. F, title II, §§ 100228, 100238(b)(1), 100241, July 6, 2012, 126 Stat. 944, 958, 962; Pub. L. 113–89, § 12, Mar. 21, 2014, 128 Stat. 1025.)

cite as: 42 USC 4013