Have you ever wondered if you can cancel your FEMA flood insurance policy after selling your home?
Or what happens if the building is destroyed, moved, or altered so it no longer qualifies for coverage?
In this article, you’ll learn exactly how FEMA’s Cancellation Reason 1 works for National Flood Insurance Program (NFIP) policies. You’ll understand the qualifying situations, what documentation is required, and how refunds are typically calculated so you can avoid surprises.
Here’s what we’ll cover:
The four situations where Reason 1 applies.
The documentation FEMA usually requires.
How prorated refunds are handled (and why full refunds are rare).
Common questions homeowners ask about cancellations.
Flood insurance cancellations under the NFIP can be confusing, especially when it comes to refunds. One of the most frequent questions we hear at The Flood Insurance Guru is:
“When can I cancel my FEMA policy — and will I get a refund?”
Reason 1 is one of the most practical and commonly used cancellation codes. It applies to everyday situations like selling a property, moving or removing a structure, suffering a total loss, or making physical changes that affect eligibility.
FEMA’s Cancellation Reason 1 applies when the insured building’s status changes in a way that makes the current NFIP policy no longer valid. The four main scenarios are:
When ownership transfers, the seller no longer needs coverage. The new owner must purchase their own policy.
If a structure is relocated or physically removed from its site, the policy tied to the original location becomes ineligible.
If a storm, fire, or other event leaves the building a total loss, the NFIP policy can be canceled.
Changes that affect NFIP eligibility — such as removing a mobile home from a permanent foundation — trigger cancellation. Mobile homes must remain on permanent foundations to qualify.
Selling your home → The buyer purchases new coverage, while you cancel with proof of sale.
Moving a manufactured home → Once removed from its permanent foundation, the structure is no longer eligible.
Losing a property to a flood or storm → The building is declared a total loss and cancellation can be requested.
To process a Reason 1 cancellation, you’ll need to provide official proof. Acceptable documentation often includes:
Proof of sale — settlement statement, certified deed, or closing documentation.
Proof of removal/relocation — courthouse records, permits, or official notices showing the structure was moved or removed.
Proof of total loss — demolition permits, loss settlement documents, or insurance claim paperwork confirming the date of destruction.
Proof of alteration — affidavits or permits showing why the property no longer meets NFIP eligibility (e.g., a mobile home removed from its foundation).
Tip: Submit the clearest official paperwork you have — carriers may request additional evidence if needed.
Most Reason 1 refunds are prorated.
This means the insurer calculates your unused premium starting from the date of the qualifying event (sale, removal, loss, or alteration) and refunds you for that period.
Prorated refund → The most common outcome.
Full refund → Rare and typically not available under Reason 1.
Example: If you sell your home six months into your policy term, you’ll receive a refund for the remaining six months, not the full premium.
As soon as you have it. Refunds are tied to the date listed on your proof, not when you submit the request.
Send the best official documentation you have and confirm with your agent whether more is needed.
No. Your refund is based solely on your policy dates and your qualifying event.
If the building is removed from the insured location and no longer eligible under NFIP rules, yes — provided you submit proof.
If you’re unsure what documents you need or how your refund will be calculated, our team can guide you. At The Flood Insurance Guru, we combine flood insurance expertise with an educational approach to help homeowners through every step.
Visit www.floodinsuranceguru.com or call 205-451-4294 for personalized assistance. You’ll also find daily education on The Flood Insurance Channel and our social platforms.
When a building is sold, moved, destroyed, or altered, FEMA’s Cancellation Reason 1 allows you to cancel your NFIP policy. To secure your refund, provide clear documentation that shows the event and its effective date. In most cases, you’ll receive a prorated refund rather than a full one.
At the end of the day, cancellations don’t need to feel overwhelming. You now know the key triggers, required documents, and refund expectations. If you need support, our team is here to help you navigate the process smoothly and make sure nothing is missed.