APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 1
6. How to Cancel
I. General Information
Flood policies may be terminated mid-term or full-term by cancellation, or full-
term by nullification. The insured may request a cancellation or nullification of
an NFIP policy for the specific reasons outlined within this section. The insured
may be entitled to a full, partial, or no refund.
II. Cancellation/Nullification
• To cancel a policy, agents must submit a completed Cancellation/
Nullification Request Form with proper documentation to the insurer.
• Upon completion of the cancellation/nullification request the insurer
must provide the insured and all interested parties with a notice of
cancellation/nullification. Interested parties include any additional
insureds, additional lenders, loss payees, trustees, or disaster
assistance agencies.
• Prior to processing a cancellation request for reason codes 8, 9, 15,
and 19, the insurer must inform eligible insureds with standard-rated
policies for property located in a non-Special Flood Hazard Area (SFHA)
of their option to convert to a Preferred Risk Policy (PRP).
Note: A copy of the Cancellation/Nullification Request form is located in
Appendix B: Forms.
A. Processing a Cancellation or Nullification Request
The insurer may accept electronic submissions if their business process
includes signature authentication and records receipt dates. Insurers are
responsible for the security and integrity of electronic transactions.
1. Signatures
a. Insured’s Signature
All named insureds must provide the insurer with a signed and dated
cancellation/nullification request except for reason codes 5, 6, 21, 22, 23,
and 25.
Below are specific exceptions when the insured’s signature is not required:
• When using cancellation reason code 1:
– In the event of foreclosure when the court documentation confirms
the unearned premium belongs to the lender.
– For a policy covering property that was eligible for coverage, but
became ineligible midterm due to physical alteration of the structure.
• When using cancellation reason code 4:
– When there is deliberately created duplicate coverage, the insurer
must cancel the policy with the later effective date.
b. Agent Signature
T
he agent must sign and date the cancellation/nullification request for all
cancellation reason codes except 6, 21, 22, 23, and 25.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 2
6. How To Cancel
2. Receipt Date
The receipt date of a cancellation/nullification request is either:
• The date the insurer initially receives the cancellation/nullification
request if the insurer receives all required documentation 60 days or
less from the insurer’s request for additional documentation; or
• The date the insurer receives the required documentation if the insurer
receives all required documentation more than 60 days from the
insurer’s request for documentation.
III. Premium Refunds
Insurers must process the return premium on policy terms for which they are
the insurer of record.
For a return premium request that covers more than two policy terms, the
insurer may submit the request and documentation to FEMA for processing.
The documentation must include the following:
• A policy cancellation request and the premium refund calculation for
each policy term.
• The insurer’s statistical records or declarations pages for each policy
term and evidence of premium payments obtained from the insured if
these documents are not available from the insurer’s records.
• Photographs verifying ineligible risks.
Insurers may send requests and documentation to FEMA by email to:
NFIPUnderwritingMailbox@fema.dhs.gov.
FEMA notifies the insurers of the premium refunded and the Expense
Allowance due to the NFIP. The insurers must maintain this documentation as
part of their underwriting files. FEMA will return rejected refund requests.
IV. Valid Cancellation Reason Codes/Nullification of
NFIP Policies
The valid reason codes for canceling/nullifying a flood policy are shown in
Tables 1–22 below. Unless otherwise stated, all conditions for each separate
reason code must be met in order to cancel a policy.
Note: The valid reason codes are not in sequence as some numbers have
been retired over time.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 3
6. How To Cancel
Table 1: Valid Cancellation Reason Code 01
Reason Code 01
Building sold, removed, destroyed, or physically altered and no longer
meets the definition of an eligible building
Valid Reasons 1. The insured sells or transfers ownership of the insured building and
does not have an insurable interest in the insured building.
2. Relocation or destruction of the insured building.
3. Alteration of the insured building rendering it ineligible for coverage.
(An example is the insured removes a mobile home from a permanent
foundation and places it on wheels.)
4. The builder or developer requests to cancel a policy mid-term because
ownership transfers to a newly created condominium association, and
the association purchased a policy under its name.
5. The building is a total loss because the building damage is greater
than or equal to the replacement cost of the building.
6. The lienholder foreclosed on the building.
Cancellation
Effective Date
The date the insured ceased to have an insurable interest in the
building or the building became ineligible for coverage. Examples include
the date of the sale of the building or the date the insured removed the
building from the described location.
Type of Refund 1. Pro-rata (pro-rated) premium refund, including Increased Cost
of Compliance (ICC) premium, Reserve Fund Assessment, and
Homeowner Flood Insurance Affordability Act of 2014 (HFIAA)
Surcharge, will apply to the policy term in which the cancellation
became effective. The refund does not include the Federal Policy Fee
and Probation Surcharge.
2. Full premium refunds apply to any subsequent policy term(s), including
fees and surcharges.
Cancellation
Request
The insurer must receive the cancellation request within 1 year of the
policy expiration date.
Required
Documentation
Bill of sale, settlement statement, closing disclosure statement, proof
of removal, proof of total loss, court documentation for foreclosed
buildings, or photographs to verify ineligible risks.
Policy Terms
Eligible for Refund
Up to 5 years prior to the receipt date of the cancellation request.
Table 2: Valid Cancellation Code Reason 02
Reason Code 02 Contents sold, removed, or destroyed
Valid Reasons 1. The insured sells or transfers ownership of the insured contents;
2. Contents completely removed or relocated from the described
location; or
3. Contents destroyed by any peril.
Cancellation
Effective Date
The date the insured ceased to have an insurable interest in the contents
at the described location, or the removal date of the contents from the
described location.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 4
6. How To Cancel
Reason Code 02 Contents sold, removed, or destroyed
Type of Refund 1. Pro-rata (pro-rated) premium refund, including ICC premium, Reserve
Fund Assessment, and HFIAA Surcharge, will apply to the policy term in
which the cancellation became effective. The refund does not include
the Federal Policy Fee and Probation Surcharge.
2. Full premium refunds apply to any subsequent policy term(s), including
fees and surcharges.
Cancellation
Request
The insurer must receive the cancellation request within 1 year of the
policy expiration date.
Required
Documentation
Bill of sale, inventory record, proof of total loss, or, in the case of
residential contents, a signed statement from the insured.
Policy Terms
Eligible for Refund
Up to 5 years prior to the receipt date of the cancellation request.
Table 3: Valid Cancellation Reason Code 03
Reason Code 03
Policy canceled and rewritten to establish a common expiration date
with other insurance coverage for same building
Conditions
1. The insurer must remain the same for the new flood policy with the
same or higher amounts of coverage. The agent must submit a new
application and premium.
2. The other insurance coverage for which the common expiration date is
established must be for building coverage on the same building insured
by the current in-force flood policy.
Cancellation
Effective Date
The effective date of the new ood policy is subject to the 30-day waiting
period. Additional or increases in coverage limits beyond the limits on the
canceled policy are subject to the 30-day waiting period.
Type of Refund Pro-rata (pro-rated) premium refund, including ICC premium, Reserve Fund
Assessment, and HFIAA Surcharge, will apply to the policy term in which
the cancellation
became effective. The refund does not include the Federal Policy Fee and
Probation Surcharge.
Cancellation
Request
The insurer must receive the cancellation request within 1 year of the
new policy effective date.
Required
Documentation
1. A new application and premium.
2. The agent must request cancellation of the prior policy upon receipt of
the new policy declarations page.
3. The insurer must retain a copy of the new policy declarations page and
the other perils policy declarations that show the building address and
policy effective dates.
Policy Terms
Eligible for Refund
Current policy term.
Table 2: Valid Cancellation Code Reason 02, continued
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 5
6. How To Cancel
Table 4: Valid Cancellation Reason Code 04
Reason Code 04 Duplicate NFIP policies
Conditions for
Duplicate Policies
for Same Named
Insured
Only one policy may be active for the same named insured for the same
coverage on the building and/or contents. If there are duplicate policies,
the insured may choose which policy to keep as long as there has not
been a deliberate creation of duplicate policies.
If deliberately created duplicate policies are active, the insurer must
cancel the policy with the later effective date. If a loss occurs while
deliberately created duplicate policies are active, the insurer must adjust
the claim according to the terms of the policy with the earlier effective
date. There are ve exceptions to the rule about canceling the deliberately
created duplicate policy with the later effective date:
1. Cancellation of the earlier policy to establish a common expiration date
with other policies (see Reason Code 3).
2. Cancellation of a Dwelling Policy because coverage is being provided
under an Residential Condominium Building Association Policy (RCBAP)
(see Reason Code 10).
3. Cancellation of an NFIP lender force-placed Mortgage Portfolio
Protection Program (MPPP) policy because the borrower purchased an
NFIP flood policy. The insurer must receive a copy of the lender’s force-
placement letter and the new flood policy declarations page with the
Cancellation/Nullification Request form.
4. The policy with the earlier effective date has been expired for more
than 30 days.
5. Cancellation of a Group Flood Insurance Policy (GFIP) replaced by a
standard-rated policy.
Conditions for
Duplicate Policies
for Different
Named Insureds
Only one ood policy may be active for different named insureds for the
same building. If there are duplicate policies, the building owner must
choose which policy to keep and the building owner must be a named
insured. For example, if a tenant purchased building coverage, the insurer
must remove the building coverage, endorse the policy to add the building
owner as a named insured, or cancel the policy. Only 1 policy with building
coverage may remain in effect.
Cancellation
Effective Date
1. For policies with the same effective date, the cancellation effective date
is the date of the policy chosen by the insured.
2. For policies with different effective dates, the policy with the later
effective date must be canceled unless it is one of the following
exceptions:
• An MPPP policy replaced by a standard-rated policy;
• The policy with the earlier effective date that has been expired for
more than 30 days; or
• A Group Flood Insurance Policy replaced by a standard-rated policy.
Type of Refund 1. Full premium refunds apply when the cancellation is effective at the
inception of the term, and for the renewal terms when the cancellation
request applies to the policy with the later effective date. A full refund of
the fees and surcharges applies for these conditions.
2. Pro-rata (pro-rated) premium refunds apply, including ICC premium,
Reserve Fund Assessment, and HFIAA Surcharge, when the cancellation
is effective mid-term. The exception to allow cancellation of the earlier
policy applies. The refund does not include the Federal Policy Fee and
Probation Surcharge.
3. No premium refunds apply to a canceled GFIP.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 6
6. How To Cancel
Reason Code 04 Duplicate NFIP policies
Cancellation
Request
The insurer must receive the cancellation request within 1 year of the
policy expiration date.
Required
Documentation
Copy of the declarations page(s) and, for the standard force-placed policy,
a copy of the force-placement letter from the lender.
Policy Terms
Eligible for Refund
Up to 5 years prior to the date of the cancellation request.
Table 5: Valid Cancellation Reason Code 05
Reason Code 05 Nonpayment of premium
Valid Reasons Valid reasons to nullify the policy for nonpayment of premium include:
1. An insured’s check payment to the agent or insurer is returned for non-
sufficient funds or rejected.
2. An insured’s credit card payment to the agent or insurer is rejected or
disputed.
Reason Code 5 is not valid if an agent advances insurance agency funds
without rst receiving payment from the insured.
Cancellation
Effective Date
The cancellation effective date is the policy inception date.
Type of Refund The insurer must provide a full refund to the agent, including all fees
and surcharges for returned or rejected insured payments to the agent.
There is no refund for returned or rejected payments made by the insured
directly to the insurer.
Cancellation
Request
The insurer must receive the cancellation request during the policy term.
Required
Documentation
The bank or credit card notice of returned or rejected payment.
Policy Terms
Eligible for Refund
Current policy term.
Table 4: Valid Cancellation Reason Code 04 continued
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 7
6. How To Cancel
Table 6: Valid Cancellation Reason Code 06
Reason Code 06 Risk not eligible for coverage
Valid Reasons An insurer issues a policy for an ineligible property. Refer to the Standard
Flood Insurance Policy (SFIP) for a list of risks not eligible for coverage. A
cancellation explanation must accompany the request.
Examples of risks not eligible at the time of application include:
1. Structures that do not meet the definition of a building.
2. Contents not located in an eligible building.
3. Policies issued under an incorrect community number for buildings not
located in an NFIP participating community.
4. Buildings located in a Coastal Barrier Resources System (CBRS).
5. Buildings declared as a 1316 property prior to the flood policy
application.
Examples of risks that were eligible at the time of application but are not
eligible at the time of renewal include:
1. Buildings determined to be a 1316 property after the time of application.
2. Buildings located in an NFIP participating community suspended after
the issuance of the flood policy.
3. Annexation of the property to a non-participating community after
issuance of the flood policy.
Cancellation
Effective Date
The effective date of the rst full policy term the property became
ineligible for coverage.
Type of Refund Full premium refund including fees and surcharges will apply to the rst full
policy term in which the property became ineligible for policy coverage and
any subsequent policy terms, provided there are no paid claims.
If there are paid claims the insurer must verify the loss history of the
property with FEMA before issuing refunds for more than two policy terms:
1. The net refund paid to the insured is the difference between the
premium refund and the amount of the paid claims if the premium
refund is greater than the amount of any paid claims.
2. The insurer must reimburse the NFIP for the difference between the
premium refund amount and the paid claims if the premium refund is
less than the amount of any paid claims.
Cancellation
Request
The insurer must receive the cancellation request within 1 year of the
policy expiration date.
Required
Documentation
An explanation describing the valid reason for the cancellation request,
along with the appropriate supporting documentation. Supporting
documentation should include information as to when the property
became ineligible for NFIP coverage.
Examples of supporting documentation that may demonstrate ineligibility
include property tax records, Section 1316 declaration, Coastal Barrier
Resources Act (CBRA) determination, photographs, or other supporting
documentation.
Policy Terms
Eligible for Refund
All prior terms the property was ineligible for NFIP coverage.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 8
6. How To Cancel
Table 7: Valid Cancellation Reason Code 07
Reason Code 07 Property closing did not occur
Conditions The insurer may nullify the policy when:
1. An insurer issues a policy and the anticipated transfer of the property
does not take place.
2. The insured does not acquire an insurable interest in the property.
Cancellation
Effective Date
The cancellation effective date will be the policy inception date.
Type of Refund Full premium refund including fees and surcharges.
Cancellation
Request
The insurer must receive the cancellation request within 1 year of the new
ood policy effective date.
Required
Documentation
Signed statement from the insured indicating that the property closing
did not occur. See sample verication letter regarding the requirement to
maintain ood insurance coverage.
Policy Terms
Eligible for
Refund
Current policy term.
Table 8: Valid Cancellation Reason Code 08
Reason Code 08 Policy not required by lender
Conditions 1. A lender determines a flood policy is required for a loan closing, but later
it is discovered that the building was not located in an SFHA at the time
of closing and flood insurance should not have been required by the
lender; and
2. There are no paid or pending claims.
3. Insurers may use this cancellation reason even for non-SFHA-rated
policies.
4. The insurer must inform eligible insureds with standard-rated policies
for a property in a non-SFHA of their option to convert to a PRP prior to
canceling the policy.
Cancellation
Effective Date
The date the insurer receives the cancellation request and all appropriate
supporting documentation.
Type of Refund Pro-rata (pro-rated) premium refund, including ICC premium, Reserve
Fund Assessment, and HFIAA Surcharge, will apply when the cancellation
effective date is during the policy term. The refund does not include the
Federal Policy Fee and Probation Surcharge.
Cancellation
Request
The insurer must receive the cancellation request within the initial
policy term.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 9
6. How To Cancel
Reason Code 08 Policy not required by lender
Required
Documentation
1. A revised flood zone determination from the lender showing that the
property is not in an SFHA.
2. If there is a discrepancy between the lender and insured’s
determinations, a FEMA Out-As-Shown Determination because of a
Letter of Map Amendment (LOMA) application must accompany the
request.
3. A signed statement from the insured that the lender does not require
a flood policy based on the revised flood zone determination. See the
sample verification letter regarding the requirement to maintain flood
insurance coverage.
Policy Terms
Eligible for Refund
Current policy term.
Table 9: Valid Cancellation Reason Code 09
Reason Code 09
Insurance no longer required by lender because property is no
longer located in an SFHA because of a map revision or LOMR
Conditions
1. A lender determines a flood policy is required because the building is
located in an SFHA.
2. After the insurer issues the flood policy, FEMA issues a map revision or
Letter of Map Revision (LOMR) that removes the building from the SFHA.
3. The lender determines coverage is no longer required for a structure on
a residential property, detached from the primary residential structure,
and that is not a residence.
4. Insurers must inform eligible insureds with standard-rated policies for
a property in a non-SFHA of their option to convert to a PRP prior to
canceling the policy.
Insurers may also use this cancellation reason if:
1. The building is rated in a non-SFHA due to grandfathering or issued as a
newly mapped policy.
Note: If the insurer receives a Letter of Map Revision Based on Fill
(LOMR-F) or a Letter of Map Revision Floodway (LOMR-FW) with the
cancellation request use Reason Code 19.
Cancellation
Effective Date
The date the insurer receives the cancellation request and all appropriate
supporting documentation.
Type of Refund Pro-rata (pro-rated) premium refund, including ICC premium, Reserve Fund
Assessment, and HFIAA Surcharge, applies when the cancellation effective
date is during the policy term. The refund does not include the Federal
Policy Fee and Probation Surcharge.
Cancellation
Request
The insurer must receive the cancellation request during the policy year.
Table 8: Valid Cancellation Reason Code 08 continued
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 10
6. How To Cancel
Reason Code 09
Insurance no longer required by lender because property is no
longer located in an SFHA because of a map revision or LOMR
Required
Documentation
A signed statement from the insured that the lender no longer requires the
policy because the property is no longer in an SFHA due to a map revision,
or coverage is no longer required by the lender for a detached structure.
A copy of the revised map or LOMR; or, in the case of multi-property
LOMRs that do not list the property’s specic building, street address, lot
number, or rural address, any of the following and a copy of the LOMR:
1. A letter that the insured received from the applicable community
official, stating that their building was removed from the SFHA by a
multi-property LOMR;
2. A letter from the applicable community official, on official letterhead,
stating that the building was included in the area removed from the
SFHA by the multi-property LOMR, which listed only boundaries/
intersections of streets, lot numbers, or rural addresses; or
3. In cases, and only in cases, where (1) a community official could not or
would not provide a letter, or (2) the building has a rural address, the
following set of two documents may be submitted:
• A copy of a legal notice, such as a real estate assessment notice or a
water/sewer notice, that shows the lot number, street or rural address,
or other legal designation of the location of the building; and
• A letter from the mortgage lender that (1) shows the lot number,
street or rural address, or other legal designation of the location
of the building, and (2) states that the building was within the
boundaries of the area removed from the SFHA by the LOMR. Letters
from community officials must match the street address and lot
number with a specific multi-property LOMR, stating that the individual
building street address, lot number, or rural address (e.g., RR, Box #,
Hwy) was included in the area covered by the LOMR. The insurer may
accept zone determinations in lieu of the documentation cited above
for these situations.
4. When a condominium association seeks to cancel a RCBAP, the
condominium association must provide a signed letter that lists the
number of units and specifies the owner of each unit. Each unit owner
must provide a release from the lender or sign a statement that there is
no lender.
See sample verication letter regarding no requirement to maintain ood
insurance coverage.
Policy Terms
Eligible for Refund
Current policy term.
Table 10: Valid Cancellation Reason Code 10
Reason Code 10 Condominium unit or association policy converting to RCBAP
Conditions
1. A standard-rated policy with only building coverage for a condominium
unit that is replaced by an RCBAP.
2. The unit owner policy and the RCBAP building limits are more than the
cost of the unit or over the program maximum limits of coverage.
Cancellation
Effective Date
The cancellation effective date is the effective date of the RCBAP.
Table 9: Valid Cancellation Reason Code 09 continued
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 11
6. How To Cancel
Reason Code 10 Condominium unit or association policy converting to RCBAP
Type of Refund 1. Pro-rata (pro-rated) premium refund, including ICC premium, Reserve
Fund Assessment, and HFIAA Surcharge will apply when coverage
provided under the RCBAP during the first policy term is duplicate. The
refund does not include the Federal Policy Fee and Probation Surcharge.
2. For policy terms after the first term, full premium refunds will apply
including fees and surcharges.
Cancellation
Request
The insurer must receive the cancellation request within 1 year of the
policy expiration date.
Required
Documentation
A copy of the RCBAP and documentation showing the replacement cost
value of the unit.
Policy Terms
Eligible for Refund
Up to 5 years prior to the receipt date of the cancellation request.
Table 11: Valid Cancellation Reason Code 12
Reason Code 12 Mortgage paid off
Conditions
1. A lender determines a flood policy is required for a mortgage
loan closing.
2. After an insurer issues the flood policy, the mortgage loan is paid off.
3. There are no paid or pending claims for the policy term(s) in process
of cancellation.
Cancellation
Effective Date
The date the insurer receives the cancellation request.
Type of Refund
1. Pro-rata (pro-rated) premium refund, including ICC premium and Reserve
Fund Assessment and HFIAA Surcharge, will apply when the cancellation
effective date is during the policy term. The refund does not include the
Federal Policy Fee and Probation Surcharge.
2. A full premium refund, including fees and surcharges, will apply to a
renewal policy if the policy renewed after a payoff of the mortgage
because it was in the renewal billing cycle.
Cancellation
Request
The insurer must receive the cancellation request during the policy year.
Required
Documentation
A signed statement from the insured that the mortgage has been paid off
and the lender no longer requires ood insurance. See sample verication
letter regarding the requirement to maintain ood insurance coverage.
Policy Terms
Eligible for Refund
The pro-rata portion of the policy term in which the mortgage payoff
occurred, and the full renewal term if the policy renewed after the
mortgage payoff.
Table 10: Valid Cancellation Reason Code 10 continued
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 12
6. How To Cancel
Table 12: Valid Cancellation Reason Code 13
Reason Code 13 Voidance prior to effective date
Conditions 1. The insured pays the premium for a new policy subject to the 30-day
waiting period or for a renewal policy.
2. Prior to the effective date of the new or renewal policy, the insured does
not want the policy to go into effect.
Cancellation
Effective Date
The policy effective date of the new or renewed policy (voided).
Type of Refund Full premium refund including fees and surcharges.
Cancellation
Request
The request must be made prior to the policy effective date. The insurer
may receive the cancellation request after the policy effective date.
Required
Documentation
A request from the insured to cancel the pending new or renewal policy.
Policy Terms
Eligible for Refund
Current year.
Table 13: Valid Cancellation Reason Code 15
Reason Code 15
Insurance no longer required based on FEMA review of lender’s
SFHA determination
Conditions 1. A lender determines a building is located in an SFHA and requires
a flood policy.
2. The borrower and/or lender sends a request for a Letter of
Determination Review (LODR) to FEMA within 45 days of the lender’s
notification to the borrower that the building is in an SFHA.
3. FEMA issues a LODR indicating the building is not located in an SFHA.
4. There are no paid or pending claims for the canceled policy term(s).
5. Insurers must inform eligible insureds with standard-rated policies for
a property in a non-SFHA of their option to convert to a PRP prior to
canceling the policy.
Insurers may also use this cancellation reason, for a policy rated in a non-
SFHA due to grandfathering, or issued as a newly mapped policy.
Cancellation
Effective Date
The date the insurer receives the cancellation request and all required
documentation.
Type of Refund 1. Pro-rata (pro-rated) premium refund, including ICC premium, Reserve
Fund Assessment and HFIAA Surcharge, will apply when the cancellation
effective date is during the policy term. The refund does not include the
Federal Policy Fee and Probation Surcharge.
2. A full premium refund, including fees and surcharges, will apply in those
cases where the policy renewed after receipt of the cancellation request
because it was in the renewal billing cycle.
Cancellation
Request
The insurer must receive the cancellation request during the policy term.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 13
6. How To Cancel
Reason Code 15
Insurance no longer required based on FEMA review of lender’s
SFHA determination
Required
Documentation
1. A copy of FEMA’s LODR.
2. A signed statement from the insured that the lender no longer requires
flood insurance. See the sample verification letter detailing the
requirement to maintain flood insurance coverage.
Policy Terms
Eligible for Refund
The pro-rata (pro-rated) portion of the policy term in which the insurer
received the cancellation request, and the full renewal term if the policy
renewed after the insurer received the cancellation request.
Table 14: Valid Cancellation Reason Code 18
Reason Code 18 Mortgage paid off on an MPPP policy
Conditions 1. The lender determines a flood policy is required as part of a mortgage
loan closing.
2. The lender applies for a policy under the MPPP.
3. The mortgage loan is paid off after an insurer issues the MPPP
flood policy,
4. There are no paid or pending claims for the canceled policy term(s).
Cancellation
Effective Date
The date the insurer receives the cancellation request.
Type of Refund
1. Pro-rata (pro-rated) premium refund, including ICC premium, Reserve
Fund Assessment, and HFIAA Surcharge, applies when the cancellation
effective date occurs during the policy term. The refund does not include
the Federal Policy Fee and Probation Surcharge.
2. A full premium refund, including fees and surcharges, will apply in those
cases where the policy renewed after the lender considers the mortgage
paid in full and the insurer receives the cancellation request during the
renewal billing cycle.
Cancellation
Request
The insurer must receive the cancellation request during the policy term.
Required
Documentation
A written statement acknowledging the paid-in-full mortgage from the
lender. A signed statement from the insured that the lender no longer
requires ood insurance. See the sample verication letter regarding the
requirement to maintain ood insurance coverage.
Policy Terms
Eligible for Refund
The pro-rata (pro-rated) portion of the policy term in which the mortgage
payoff occurred, and the full renewal term if the policy renewed after the
mortgage payoff.
Table 13: Valid Cancellation Reason Code 15 continued
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 14
6. How To Cancel
Table 15: Valid Cancellation Reason Code 19
Reason Code 19
Insurance no longer required by the lender because the building has
been removed from the SFHA by means of a LOMA, including LOMR-F
and LOMR-FW
Conditions 1. A lender determines a flood policy is required because the building is
located in an SFHA.
2. FEMA issues a LOMA, including LOMR-F and LOMR-FW, that removes the
building from the SFHA after the insurer issues the flood policy.
3. The lender confirms in writing that a flood policy is no longer required.
4. There are no paid or pending claims for the canceled policy term(s).
Insurers may also use this cancellation reason for a policy rated in a non-
SFHA due to grandfathering, or issued as a newly mapped policy.
Insurers must inform eligible insureds with standard-rated policies for
a property in a non-SFHA of their option to convert to a PRP prior to
canceling the policy.
Note: The RCBAP requires a signed letter from the condominium
association listing the number of units and specifying the owner of each
unit. Every unit owner must provide a lender release or a statement that
there is no lender. See sample verication letter at the end of this section.
Cancellation
Effective Date
Current policy term and 1 prior policy term provided the LOMA issuance
occurred within 60 days before the current policy’s effective date and
there are no pending or issued claim payments during the canceled terms.
Type of Refund A premium refund, including ICC, Reserve Fund Assessment, and HFIAA
Surcharge. The refund does not include the Federal Policy Fee and
Probation Surcharge.
Cancellation
Request
Insurer must receive the request during the policy term or within 6 months
of the policy expiration date.
Required
Documentation
Statement from the mortgagee that ood insurance is no longer required
or a signed statement from the insured that the lender no longer
requires ood insurance. See the sample verication letter regarding the
requirement to maintain ood insurance coverage. Also, include a copy of
the LOMA.
Policy Terms
Eligible for Refund
Current policy term and 1 prior policy term provided the LOMA issuance
took place within 60 days before the current policy’s effective date.
There are no paid or pending claims during the year of the policy term
cancellation.
Example: The ood policy was effective from January 1, 2015, to January
1, 2016, and renewed January 1, 2016, to January 1, 2017. The effective
date of the LOMA is December 1, 2015. The cancellation will be effective
January 1, 2015.
Note: There will be no refund if the date of the LOMA is more than 60 days
prior to the most recent renewal or for a policy term that ended prior to the
LOMA effective date.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 15
6. How To Cancel
Table 16: Valid Cancellation Reason Code 20
Reason Code 20 Policy written to the wrong facility
Conditions The wrong insurer issues a policy with building coverage for an SRL.
Cancellation
Effective Date
The cancellation effective date will be the effective date of the current
policy (nullied).
Type of Refund Full premium refund including fees and surcharges.
Cancellation
Request
The insurer must receive the cancellation request during the current
policy term.
Required
Documentation
A report from the NFIP that lists the building as an SRL Property.
Policy Terms
Eligible for Refund
Current policy term.
Table 17: Valid Cancellation Reason Code 21
Reason Code 21 Continuous lake flooding or closed basin lakes
Conditions 1. FEMA notification of a continuous lake flooding or closed basin lakes
property.
2. The cancellation can be for only 1 term of a policy.
Cancellation
Effective Date
Must be after the date of loss.
Type of Refund No premium refund allowed.
Cancellation
Request
N/A
Required
Documentation
FEMA notication.
Policy Terms
Eligible for
Refund
N/A
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 16
6. How To Cancel
Table 18: Valid Cancellation Reason Code 22
Reason Code 22 Cancel/rewrite due to misrating
Valid Reasons 1. To correct a policy effective date;
2. To cancel and rewrite ineligible PRPs or MPPP policies within the
same company;
3. To cancel a standard-rated policy that is eligible for a PRP due to
misrating, as defined in the How to Endorse section of this manual. This
includes a standard-rated policy incorrectly rated in an SFHA, or failure
to apply for a Newly Mapped property;
4. The property was eligible for continuous coverage or built-in-compliance
grandfathering discovered after the time of application; and
5. System constraints prevent a legitimate correction.
Conditions There are no paid or pending claims for the canceled policy term(s).
Cancellation/
Rewrite Effective
Dates
The cancellation date and the rewritten policy effective date must be the
effective date of the rst eligible policy term.
Type of Refund Full premium refund including fees and surcharges. Apply the refund to the
newly rewritten policy.
Cancellation
Request
N/A
Required
Documentation
The insurer must retain documentation supporting the misrating. For a
standard-rated policy eligible for the PRP, submit one of the following:
1. A LOMA.
2. A LOMR.
3. A letter indicating the property address and flood zone of the building,
and signed and dated by a local community official.
4. An EC indicating the exact location and flood zone of the building signed
and dated by a surveyor, an engineer, an architect, or a local community
official.
5. A flood zone determination certification that guarantees the accuracy of
the information; or
6. A copy of the most recent flood map marked to show the exact location
and flood zone of the building, though additional documentation may be
required if the building is close to the zone boundary.
Policy Terms
Eligible for Refund
1. Going back a maximum of 5 years from the current term when
converting a standard-rated B, C, or X zone policy to a PRP; or a policy
misrated in an SFHA that is eligible for a PRP.
2. In determining the number of policy years for refund eligibility, do not
include terms that expired before a lapse in coverage.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 17
6. How To Cancel
Table 19: Valid Cancellation Reason Code 23
Reason Code 23 Fraud
Valid Reasons FEMA determines that an insured or agent committed fraud or
misrepresented a material fact.
Cancellation
Effective Date
The cancellation effective date will be the effective date of the policy term
during which the fraudulent act or misrepresentation of material fact was
committed.
Type of Refund 1. There is no premium refund for this reason code.
2. If the agent did not commit or participate in the fraud, the agent will
retain the full commission and there is no reduction to the insurer’s
expense allowance.
Cancellation
Request
N/A
Required
Documentation
FEMA notication.
Policy Terms
Eligible for Refund
N/A
Table 20: Valid Cancellation Reason Code 24
Reason Code 24 Cancel/rewrite due to map revision, LOMA, or LOMR
Valid Reasons To cancel a standard-rated ood insurance policy and rewrite to a PRP
within the same company as the result of a map revision, LOMA, or LOMR.
Conditions There are no paid or pending claims for the canceled policy term(s).
Cancellation/
Rewrite Effective
Dates
The cancellation date and the rewritten policy effective date must be the
effective date of the rst eligible policy term.
Type of Refund Full premium refund including fees and surcharges. The insurer must apply
the refund to the new rewritten policy.
Cancellation
Request
The insurer must receive the request during the policy term.
Required
Documentation
1. A copy of the revised map, LOMA, or LOMR.
2. A signed and dated cancellation/nullification request.
Policy Terms
Eligible for Refund
Up to ve policy years from receipt date of cancellation request provided
there are no paid or pending claims for the canceled policy term(s).
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 18
6. How To Cancel
Table 21: Valid Cancellation Reason Code 25
Reason Code 25 HFIAA Section 28 refund
Valid Reasons To cancel and rewrite policies subject to the HFIAA.
Cancellation
Effective Date
The policy term affected by HFIAA Section 28 reunderwriting on or after
October 1, 2016 or renewing on or after October 1, 2017.
Type of Refund Full premium refund including fees and surcharges. The insurer must apply
the refund to the new rewritten policy.
Cancellation
Request
N/A
Required
Documentation
1. Declarations page; and
2. Flood zone determination, a copy of the current map, or any other
applicable documentation.
Policy Terms
Eligible for Refund
Up to ve years.
Table 22: Valid Cancellation Reason Code 26
Note: Cancellation request must be submitted to FEMA for review.
Reason Code 26 Duplicate policy from source other than NFIP
Valid Reasons To cancel an NFIP policy when the insured obtained a duplicate policy
from sources other than the NFIP. This reason can only be used when the
insured did not intend to renew or purchase the NFIP policy because they
purchased duplicate ood insurance coverage from a non-NFIP insurer.
The NFIP will presume that an insured did not intend to renew their policy
if they purchased a duplicate non-NFIP policy prior to the NFIP policy’s
purchase or renewal date.
If the insured requested to cancel or not renew the NFIP policy prior to the
NFIP policy effective date, refer to Table 12: Reason Code 13 Voidance
prior to effective date.
Cancellation
Effective Date
The effective date of the NFIP policy (nullied).
Type of Refund Full premium refund including fees and surcharges.
Cancellation
Request
An NFIP insurer may cancel (nullify) a policy using this reason code without
further approval from FEMA if: (1) the policyholder purchased a duplicate
non-NFIP policy prior to the NFIP policy’s purchase or renewal date, and (2)
submitted the request to the NFIP insurer within 30 days of the NFIP policy
becoming effective. FEMA must review and approve all other requests
under this reason code.
These requests can be sent to NFIPUnderwritingmailbox@fema.dhs.gov
with an explanation explaining the circumstances and a copy of both the
NFIP and non-NFIP policy.
Required
Documentation
Evidence of valid duplicate non-NFIP flood insurance policy, such as a
declaration page.
Policy Terms
Eligible for Refund
Current year.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 19
6. How To Cancel
V. Processing Outcomes for Cancellation/Nullification
of a Flood Insurance Policy
REASON CODE
for Cancellation/
Nullification
SIGNATURE
REQUIRED
PREMIUM REFUND
(Including ICC,
Reserve Fund
Assessment, and
HFIAA Surcharge)
PROBATION
SURCHARGE
FEDERAL
POLICY FEE
PRODUCER COMMISSION
(Direct Business Only)
Insured,
Agent or
Both Full
Pro
Rata
Full
Refund
Fully
Earned
Full
Refund
Fully
Earned
Full
Deduction
Pro
Rata Retained
1 *
× × × ×
2 Both
× × × ×
3 Both
× × × ×
4 *
× × × ×
5 Agent
× × × ×
6 *
× × × ×
7 Both
× × × ×
8 Both
× × × ×
9 Both
× × × ×
10 Both
× × × ×
12 Both
× × × ×
13 Both
× × × ×
15 Both
× × × ×
18 Both
× × × ×
19 Both
× × × ×
20 Both
× × × ×
21 *
NO REFUND OF PREMIUM, FEDERAL POLICY FEE, RESERVE
FUND ASSESSMENT AND HFIAA SURCHARGE ALLOWED
×
22 *
× × × ×
23 *
NO REFUND OF PREMIUM, FEDERAL POLICY FEE, RESERVE
FUND ASSESSMENT AND HFIAA SURCHARGE ALLOWED
×
24 Both
× × × ×
25
*
× × × ×
26
Both
× × × ×
* Refer to the signature section at the beginning of How to Cancel.
APRIL 2021 NFIP FLOOD INSURANCE MANUAL 6 • 20
6. How To Cancel
VI. Sample Verification Letter
SAMPLE VERIFICATION LETTER
VERIFICATION THAT THERE IS NO REQUIREMENT TO MAINTAIN FLOOD
INSURANCE COVERAGE WITH THE NATIONAL FLOOD INSURANCE PROGRAM
<Insured Property Address>
I, , am not required by a lender, loss payee, landlord, or any
Federal agency to maintain flood insurance through the National Flood Insurance Program for the above
referenced property pursuant to any statute, regulation, or contract, and I am aware that by canceling my
coverage, I may lose eligibility for any subsidized premium rates made available through the National Flood
Insurance Program.
Check the reason that best applies:
Property Closing Did Not Occur
Policy Not Required by Mortgagee Due to a Revised Zone Determination by Mortgagee
Insurance No Longer Required by Mortgagee Because Property is no Longer in a
Special Flood Hazard Area due to Physical Map Revision
Coverage No Longer Required by Mortgagee for a Detached Structure
Mortgage Paid Off
Insurance No Longer Required Based on FEMA Review of Lender’s Determination by
Means of a Letter of Determination Review
Insurance No Longer Required by the Mortgagee Because the Building is Determined Outside of the
Special Flood Hazard Area by means of a Letter of Map Amendment
I CERTIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS TRUE AND CORRECT. I UNDERSTAND THAT
ANY FALSE STATEMENTS MAY CAUSE MY POLICY TO BE VOID.
Insured Name (Printed)
Insured Signature Date
