Coverage for windstorms

Section 1304 of the National Flood Insurance Act of 1968 (42 U.S.C. 4011) is amended— (1)by redesignating subsection (c) as subsection (d); and (2)by inserting after subsection (b) the following new subsection:

(c)

Multiperil coverage for damage from flood or windstorm and separate coverage for windstorm

(1)

In general

The national flood insurance program established pursuant to subsection (a) shall enable the purchase of the following coverages: (A)

Multiperil coverage

Optional insurance against loss resulting from physical damage to or loss of real property or personal property related thereto located in the United States arising from any flood or windstorm, subject to the limitations in this subsection and section 1306(b); and (B)

Separate windstorm coverage

Optional insurance against loss resulting from physical damage to or loss of real property or personal property related thereto located in the United States arising from any windstorm, subject to the limitations in this subsection and section 1306(b). (2)

Community participation requirement

Multiperil coverage pursuant to paragraph (1)(A) and windstorm coverage pursuant to paragraph (1)(B) may not be provided in any area (or subdivision thereof) unless an appropriate public body shall have adopted adequate mitigation measures (with effective enforcement provisions) which the Director finds are consistent with the criteria for construction described in the International Code Council building codes relating to wind mitigation. (3)

Relationship to flood insurance coverage

(A)

Prohibition against duplicative coverage

Multiperil coverage pursuant to paragraph (1)(A) may not be provided with respect to any structure (or the personal property related thereto) for any period during which such structure is covered, at any time, by flood insurance coverage made available under this title. (B)

Requirement to maintain flood insurance coverage

Windstorm coverage pursuant to paragraph (1)(B) may be provided only with respect to a structure (and the personal property related thereto) that is covered by flood insurance coverage made available under this title and only during the period that such structure (and personal property) are so covered. (4)

Nature of coverage

(A)

Multiperil coverage

Multiperil coverage pursuant to paragraph (1)(A) shall— (i)cover losses only from physical damage resulting from flooding or windstorm; and (ii)provide for approval and payment of claims under such coverage upon proof that such loss must have resulted from either windstorm or flooding, but shall not require for approval and payment of a claim that the specific cause of the loss, whether windstorm or flooding, be distinguished or identified. (B)

Separate windstorm coverage

Windstorm coverage pursuant to paragraph (1)(B) shall— (i)cover losses only from physical damage resulting from windstorm; and (ii)provide for approval and payment of claims under such coverage or under the flood insurance coverage required to be maintained under paragraph (3)(B) upon a determination that such loss from windstorm or flooding, respectively, but shall not require for approval and payment of a claim that the insured distinguish or identify the specific cause of the loss, whether windstorm or flooding. (5)

Actuarial rates

Multiperil coverage pursuant to paragraph (1)(A) and windstorm coverage pursuant to paragraph (1)(B) shall be made available for purchase for a property only at chargeable risk premium rates that, based on consideration of the risks involved and accepted actuarial principles, and including operating costs and allowance and administrative expenses, are required in order to make such coverage available on an actuarial basis for the type and class of properties covered. (6)

Terms of coverage

The Director shall, after consultation with persons and entities referred to in section 1306(a), provide by regulation for the general terms and conditions of insurability applicable to properties eligible for multiperil coverage pursuant to paragraph (1)(A) and such terms and conditions applicable to properties eligible for windstorm coverage pursuant to paragraph (1)(B), subject to the provisions of this subsection, including— (A)the types, classes, and locations of any such properties which shall be eligible for such coverages, which shall include residential and nonresidential properties; (B)subject to paragraph (7), the nature and limits of loss or damage in any areas (or subdivisions thereof) which may be covered by such coverages; (C)the classification, limitation, and rejection of any risks which may be advisable; (D)appropriate minimum premiums; (E)appropriate loss deductibles; and (F)any other terms and conditions relating to insurance coverage or exclusion that may be necessary to carry out this subsection. (7)

Limitations on amount of coverage

(A)

Multiperil coverage

The regulations issued pursuant to paragraph (6) shall provide that the aggregate liability under multiperil coverage made available under this subsection shall not exceed the lesser of the replacement cost for covered losses or the following amounts, as applicable: (i)

Residential structures

In the case of residential properties, which shall include structures containing multiple dwelling units that are made available for occupancy by rental (notwithstanding any treatment or classification of such properties for purposes of section 1306(b))— (I)for any single-family dwelling, $500,000; (II)for any structure containing more than one dwelling unit, $500,000 for each separate dwelling unit in the structure, which limit, in the case of such a structure containing multiple dwelling units that are made available for occupancy by rental, shall be applied so as to enable any insured or applicant for insurance to receive coverage for the structure up to a total amount that is equal to the product of the total number of such rental dwelling units in such property and the maximum coverage limit per dwelling unit specified in this clause; and (III)$150,000 per dwelling unit for— (aa)any contents related to such unit; and (bb)any necessary increases in living expenses incurred by the insured when losses from flooding or windstorm make the residence unfit to live in. (ii)

Nonresidential properties

In the case of nonresidential properties (including church properties)— (I)$1,000,000 for any single structure; and (II)$750,000 for— (aa)any contents related to such structure; and (bb)in the case of any nonresidential property that is a business property, any losses resulting from any partial or total interruption of the insured’s business caused by damage to, or loss of, such property from flooding or windstorm, except that for purposes of such coverage, losses shall be determined based on the profits the covered business would have earned, based on previous financial records, had the flood or windstorm not occurred. (B)

Separate windstorm coverage

The regulations issued pursuant to paragraph (6) shall provide that windstorm coverage pursuant to paragraph (1)(B) for a property shall not exceed the amount such that the aggregate liability under flood insurance coverage required to be maintained under paragraph (3)(B) for the property and such windstorm coverage for the property does not exceed the applicable coverage limit for the property set forth in subparagraph (A) of this paragraph. (8)

Effective Date

This subsection shall take effect on, and shall apply beginning on, the expiration of the 6-month period that begins on the date of the enactment of the Multiple Peril Insurance Act of 2009.