PLMAeasy
A Cape Cod homeowner with an MPIUA FAIR Plan dwelling policy suffers $80,000 of damage when storm surge floods the first floor. How does the FAIR Plan respond?
The FAIR Plan excludes flood; the homeowner must look to a separate flood policy for surge damage
BThe FAIR Plan pays the full loss because MPIUA includes statutory flood coverage
CThe FAIR Plan pays half and NFIP pays half on a pro-rata basis
DThe FAIR Plan pays only after the homeowner first exhausts a separate earthquake endorsement, since MPIUA treats storm surge as a seismic event rather than as flood
Why this is the answer
The MPIUA FAIR Plan basic property form mirrors the Standard Fire Policy plus extended coverage and incorporates the standard flood exclusion. Storm surge is treated as flood, regardless of whether wind-driven. Coastal Massachusetts homeowners therefore typically pair an MPIUA wind policy with a separate NFIP flood policy from the National Flood Insurance Program. The two policies are not pro-rated; each responds within its own coverage grant.
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