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B, NFIP policy $ 15,000 $ 500 Deductible e DIC policy $300,000 $15,000 Deductible , , NFIP pays 15.000 X (15,000) = $1,125.00 200,000 (less deductible) DIC pays $ 0 C. NFIP policy $200,000 $ 500 Deductible DIC policy $200,000 $15,000 Deductible NFIP pays 200.000 X (15,000) = $15,000 200,000 (less deductible) DIC pays $ 0 NOTE: In this instance, if the loss had exceeded $15,000, the DIC policy still would have paid nothing until the loss exceeded $200,000. · Difference In Coverage (DIC) e VoidancenThe policy will be deemed void from its inception: (1) if it is discovered that the property is not eligible for coverage; (2) if there has been any false swearing, or fraudulent or willful concealment, or misrepresentation of any material fact in connection with the application or renewal; (3) or if the amount submitted is less than $75.00. If the insured property is located in a community suspended from participation, . the voidance occurs at the end of the last day of the policy year (applicable to 3-year policies only). Reduction by Reformation--Due to insufficient premium: . o If the insufficient premium, or other rating error, is discovered prior to a loss, coverage I will be provided only up to the limits that the premium submitted will purchase. A notice of additional premium due is sent to the producer or other payor, who then may remit additional premium to bring coverage up to the desired limits. If additional premium is not received, coverage continues at the lower amounts for the rest of the policy term. 'I I Ii . I o If the insufficient premium or rating error is discovered following a loss, coverage will be reduced as described above, unless willful misrepresentation can be demonstrated, in which case the policy is void. If an additional premium is received within thirty (30) days of an underpayment notice, the policy will be reformed from its inception date. If no additional premium is received, coverage continues at the lower amount determined above. e Mortgagee-- The policy will recognize the interest of any mortgagee, trustee or loss payee of whom the NFIP has actual notice prior to the payment of loss. Should the insured fail to file a Proof of Loss, the mortgagee will have sixty (60) days from notice of such failure within which to file a Proof of Loss for its interest in the loss. Should the policy lapse or be cancelled, coverage will continue for thirty (30) days from notice of such lapse or cancellation for the benefit of the mortgagee. October 1992 POL 11