If the insured has a dwelling flood policy for a primary structure they only live in 30% of the time, how will their claim be settled?

In the scenario where the insured has a dwelling flood policy for a primary structure that they occupy only 30% of the time, the claim will be settled based on the occupancy requirement set forth by the insurance policy. Most flood policies stipulate that for a dwelling to qualify for replacement cost coverage, it must be a primary residence that is occupied regularly.

Because the insured only lives in the dwelling 30% of the time, this indicates that it doesn't meet the criteria of being a primary residence as defined by the insurance policy, hence they will not be eligible for replacement cost benefits. Instead, they may only qualify for actual cash value or modified replacement cost coverage, which typically reflects depreciation.

This aspect of flood insurance is crucial for policyholders to understand, as it emphasizes the importance of maintaining accurate occupancy status to avoid potential settlement issues when making a claim. It ensures that individuals have realistic expectations regarding the insurance coverage and the limits established by their policy.