Natural disasters like hurricanes or tornadoes can cause flood and wind damage to municipal property and vehicles. The SC Municipal Insurance and Risk Financing Fund coverage contract has specific language about flood coverage and named storms.
Floods can cause damage even with only a minimal amount of floodwater, and so municipalities should protect property against floods by purchasing flood insurance. The National Flood Insurance Program is managed by the Federal Emergency Management Agency, and is delivered by both insurance companies and the NFIP. Flood coverage is excluded for Real and Personal Property located within a Special Flood Hazard Area, or SFHA, as defined by FEMA. SFHAs include, but are not limited to Zones A, AO, AH, A1-30, AE, A99, AR, AR/A1-30, AR/AE, AR/AO, AR/AH, AR/A, VO, V1-30, Zone V, Zone VE, and Zones V1-V30.
The flood coverage exclusion for SCMIRF contains an exception stating that SCMIRF will provide limited coverage for losses to properties eligible for coverage through NFIP. This coverage is available only in excess of the NFIP maximum limits that are or would have been available to the member or covered person, regardless of whether the member or covered person has purchased coverage through NFIP. This exclusion is also subject to an exception stating that SCMIRF will provide limited coverage for losses to properties ineligible for coverage through the NFIP, but only in excess of the member’s property deductible.
The flood zone that SCMIRF uses when adjusting claims is the flood zone in effect at the beginning of the policy year coverage contract. If the flood exclusion applies, SCMIRF will provide denial letters to members when losses occur. Members can use these letters to seek additional funding from FEMA.
The named storm deductible applies to losses to covered property within applicable counties caused directly or indirectly by a named storm, regardless of any other cause or event that contributes concurrently or in any sequence to the loss. A named storm is any specific storm system with sustained wind speeds of 39 miles per hour or greater and has been named and declared by the National Hurricane Service or Central Pacific Hurricane Center to be a hurricane, typhoon, tropical cyclone or tropical storm.
This deductible applies to cities located in Beaufort, Charleston, Colleton, Georgetown and Horry counties. The greater of the contract deductible of $1,000 or the calculated named storm deductible of 1% per unit of insurance applies. Both amounts do not apply unless the member has elected a property deductible using a resolution passed by its governing body and for which a premium credit has been given. SCMIRF will not pay for loss until the amount of loss exceeds the applicable named storm deductible. Once the loss exceeds the named storm deductible, SCMIRF will then pay the amount of loss in excess of that deductible up to the applicable scheduled limit.
Named storm deductibles are higher than noncatastrophic deductibles so that property insurance can be offered in areas more likely to sustain catastrophic losses from named storms, while keeping coverage affordable.
SCMIRF members can find additional information about flood coverage and named storm deductibles in their coverage contract. For questions, contact Robert Collins, underwriting manager, at firstname.lastname@example.org or Cindy Martellini, claims manager at email@example.com.