Florida Insurance Licensing Practice Exam

Which of the following is false concerning flood insurance?

1. A community applies for flood coverage and during this time, it is in the 'emergency program'

2. To be insured for flood, a new building only must have the walls up

3. Two acres must be inundated with water - flooded

4. Loss to a detached garage would be settled on an actual cash value basis

The correct answer is: To be insured for flood, a new building only must have the walls up

Flood insurance requires more than just the walls of a new building being built. It also requires things such as electrical and plumbing systems to be in place. Option A is incorrect because communities usually do not apply for flood coverage, but rather the National Flood Insurance Program determines if a community qualifies for coverage. Option C is incorrect because the two acres of land must only be partially affected by floodwaters, not completely inundated. Option D is incorrect because loss to a detached garage would be settled on a replacement cost basis, not an actual cash value basis.