---
kind: "section"
citation: "42 U.S.C. § 4057"
title: "42"
title_heading: "The Public Health and Welfare"
number: "4057"
heading: "Alternative loss allocation system for indeterminate claims"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/4057"
units:
  - "Chapter 50 — National Flood Insurance"
  - "Subchapter II — Organization and Administration of Flood Insurance Program"
  - "Part A — Industry Program With Federal Financial Assistance"
---

# §4057. Alternative loss allocation system for indeterminate claims

- (a) **Definitions—** In this section:
  - (1) **Administrator—** The term “[Administrator](/usc/42/4003.md?p=a-6)” means the [Administrator](/usc/42/4003.md?p=a-6) of the Federal Emergency Management [Agency](/usc/42/8262.md?p=1).
  - (2) **COASTAL Formula—** The term “COASTAL Formula” means the formula established under [subsection (b)](#b).
  - (3) **Coastal State—** The term “coastal [State](/usc/42/4121.md?p=a-2)” has the meaning given the term “coastal [state](/usc/42/4121.md?p=a-2)” in [section 1453 of title 16](/usc/16/1453.md), except that the term shall not apply with respect to a [State](/usc/42/4121.md?p=a-2) or territory that has an operational wind and [flood](/usc/42/4121.md?p=a-1) loss [allocation](/usc/42/2021b.md?p=2) system.
  - (4) **Indeterminate loss—**
    - (A) **In general—** The term “indeterminate loss” means, as determined by an insurance claims adjuster certified under the [national flood insurance program](/usc/42/4004.md?p=a-4) and in consultation with an engineer as appropriate, a loss resulting from physical damage to, or loss of, property located in any coastal [State](/usc/42/4121.md?p=a-2) arising from the combined perils of [flood](/usc/42/4121.md?p=a-1) and wind associated with a named storm.
    - (B) **Requirements—** An insurance claims adjuster certified under the [national flood insurance program](/usc/42/4004.md?p=a-4) shall only determine that a loss is an indeterminate loss if the claims adjuster determines that—
      - (i) no material remnant of physical buildings or man-made structures remain except building foundations for the specific property for which the claim is made; and
      - (ii) there is insufficient or no tangible evidence created, yielded, or otherwise left behind of the specific property for which the claim is made as a result of the named storm.
  - (5) **Named storm—** The term “named storm” means any organized weather system with a defined surface circulation and maximum sustained winds of not less than 39 miles per hour which the National Hurricane Center of the [United States](/usc/42/4121.md?p=a-2) National Weather Service names as a tropical storm or a hurricane.
  - (6) **Post-storm assessment—** The term “post-storm assessment” means the post-storm assessment developed under [section 3611(b) of title 33](/usc/33/3611.md?p=b).
  - (7) **State—** The term “[State](/usc/42/4121.md?p=a-2)” means a [State](/usc/42/4121.md?p=a-2) of the [United States](/usc/42/4121.md?p=a-2), the District of Columbia, the Commonwealth of Puerto Rico, and any other territory or possession of the [United States](/usc/42/4121.md?p=a-2).
  - (8) **Secretary—** The term “[Secretary](/usc/42/242q–4.md?p=2)” means the [Secretary](/usc/42/242q–4.md?p=2) of Homeland Security.
  - (9) **Standard insurance policy—** The term “standard insurance policy” means any insurance policy issued under the [national flood insurance program](/usc/42/4004.md?p=a-4) that covers loss or damage to property resulting from water peril.
  - (10) **Property—** The term “property” means real or personal property that is insured under a standard insurance policy for loss or damage to structure or contents.
  - (11) **Under Secretary—** The term “Under [Secretary](/usc/42/242q–4.md?p=2)” means the Under [Secretary](/usc/42/242q–4.md?p=2) of Commerce for Oceans and Atmosphere, in the Under [Secretary](/usc/42/242q–4.md?p=2)’s capacity as [Administrator](/usc/42/4003.md?p=a-6) of the National Oceanic and Atmospheric Administration.
- (b) **Establishment of flood loss allocation formula for indeterminate claims—**
  - (1) **In general—** Not later than 180 days after the date on which the protocol is established under [section 3611(c)(1) of title 33](/usc/33/3611.md?p=c-1), the [Secretary](/usc/42/242q–4.md?p=2), acting through the [Administrator](/usc/42/4003.md?p=a-6) and in consultation with the Under [Secretary](/usc/42/242q–4.md?p=2), shall publish for comment in the Federal Register a standard formula to determine and allocate wind losses and [flood](/usc/42/4121.md?p=a-1) losses for claims involving indeterminate losses.
  - (2) **Contents—** The standard formula established under [paragraph (1)](#b-1) shall—
    - (A) incorporate data available from the Coastal Wind and Water Event Database established under [section 3611(f) of title 33](/usc/33/3611.md?p=f);
    - (B) use relevant data provided on the [National Flood Insurance Program](/usc/42/4004.md?p=a-4) Elevation Certificate, or other data or information used to determine a property’s current risk of [flood](/usc/42/4121.md?p=a-1), as determined by the [Administrator](/usc/42/4003.md?p=a-6), for each indeterminate loss for which the formula is used;
    - (C) consider any sufficient and credible evidence, approved by the [Administrator](/usc/42/4003.md?p=a-6), of the pre-event condition of a specific property, including the findings of any policyholder or insurance claims adjuster in connection with the indeterminate loss to that specific property;
    - (D) include other measures, as the [Administrator](/usc/42/4003.md?p=a-6) considers appropriate, required to determine and allocate by mathematical formula the property damage caused by [flood](/usc/42/4121.md?p=a-1) or storm surge associated with a named storm; and
    - (E) subject to [paragraph (3)](#b-3), for each indeterminate loss, use the post-storm assessment to allocate water damage ([flood](/usc/42/4121.md?p=a-1) or storm surge) associated with a named storm.
  - (3) **Degree of accuracy required—** The standard formula established under [paragraph (1)](#b-1) shall specify that the [Administrator](/usc/42/4003.md?p=a-6) may only use the post-storm assessment for purposes of the formula if the Under [Secretary](/usc/42/242q–4.md?p=2) certifies that the post-storm assessment has a degree of accuracy of not less than 90 percent in connection with the specific indeterminate loss for which the assessment and formula are used.
- (c) **Authorized use of post-storm assessment and COASTAL Formula—**
  - (1) **In general—** Subject to [paragraph (3)](#c-3), the [Administrator](/usc/42/4003.md?p=a-6) may use the post-storm assessment and the COASTAL Formula to—
    - (A) review [flood](/usc/42/4121.md?p=a-1) loss payments for indeterminate losses, including as part of the quality assurance reinspection program of the Federal Emergency Management [Agency](/usc/42/8262.md?p=1) for claims under the [national flood insurance program](/usc/42/4004.md?p=a-4) and any other process approved by the [Administrator](/usc/42/4003.md?p=a-6) to review and validate payments under the [national flood insurance program](/usc/42/4004.md?p=a-4) for indeterminate losses following a named storm; and
    - (B) assist the [national flood insurance program](/usc/42/4004.md?p=a-4) to—
      - (i) properly cover qualified [flood](/usc/42/4121.md?p=a-1) loss for claims for indeterminate losses; and
      - (ii) avoid paying for any loss or damage to property caused by any peril (including wind), other than [flood](/usc/42/4121.md?p=a-1) or storm surge, that is not covered under a standard policy under the [national flood insurance program](/usc/42/4004.md?p=a-4).
  - (2) **Federal disaster declaration—** Subject to [paragraph (3)](#c-3), in order to expedite claims and reduce costs to the [national flood insurance program](/usc/42/4004.md?p=a-4), following any major [disaster](/usc/42/5204.md?p=2) declared by the President under [section 5170 of this title](/usc/42/5170.md) relating to a named storm in a coastal [State](/usc/42/4121.md?p=a-2), the [Administrator](/usc/42/4003.md?p=a-6) may use the COASTAL Formula to determine and pay for any [flood](/usc/42/4121.md?p=a-1) loss covered under a standard insurance policy under the [national flood insurance program](/usc/42/4004.md?p=a-4), if the loss is an indeterminate loss.
  - (3) **National Academy of Sciences evaluation—**
    - (A) **Evaluation required—**
      - (i) **Evaluation—** Upon publication of the COASTAL Formula in the Federal Register as required by [subsection (b)(1)](#b-1), and each time the [Administrator](/usc/42/4003.md?p=a-6) modifies the COASTAL Formula, the National Academy of Sciences shall—
        - (I) evaluate the expected financial impact on the [national flood insurance program](/usc/42/4004.md?p=a-4) of the use of the COASTAL Formula as so established or modified; and
        - (II) evaluate the validity of the scientific assumptions upon which the formula is based and determine whether the COASTAL formula[^1] can achieve a degree of accuracy of not less than 90 percent in allocating [flood](/usc/42/4121.md?p=a-1) losses for indeterminate losses.
      - (ii) **Report—** The National Academy of Sciences shall submit a report containing the results of each evaluation under [clause (i)](#c-3-A-i) to the [Administrator](/usc/42/4003.md?p=a-6), the Committee on Banking, Housing, and Urban Affairs and the Committee on Commerce, Science, and Transportation of the Senate, and the Committee on Financial Services and the Committee on Science, Space, and Technology of the House of Representatives.
    - (B) **Effective date and applicability—**
      - (i) **Effective date—** Paragraphs (1) and (2) of this subsection shall not take effect unless the report under [subparagraph (A)](#c-3-A) relating to the establishment of the COASTAL Formula concludes that the use of the COASTAL Formula for purposes of paragraph[^2] (1) and (2) would not have an adverse financial impact on the [national flood insurance program](/usc/42/4004.md?p=a-4) and that the COASTAL Formula is based on valid scientific assumptions that would allow a degree of accuracy of not less than 90 percent to be achieved in allocating [flood](/usc/42/4121.md?p=a-1) losses for indeterminate losses.
      - (ii) **Effect of modifications—** Unless the report under [subparagraph (A)](#c-3-A) relating to a modification of the COASTAL Formula concludes that the use of the COASTAL Formula, as so modified, for purposes of paragraphs [(1)](#c-1) and [(2)](#c-2) would not have an adverse financial impact on the [national flood insurance program](/usc/42/4004.md?p=a-4) and that the COASTAL Formula is based on valid scientific assumptions that would allow a degree of accuracy of not less than 90 percent to be achieved in allocating [flood](/usc/42/4121.md?p=a-1) losses for indeterminate losses the [Administrator](/usc/42/4003.md?p=a-6) may not use the COASTAL Formula, as so modified, for purposes of paragraphs [(1)](#c-1) and [(2)](#c-2).
    - (C) **Funding—** Notwithstanding [section 4017 of this title](/usc/42/4017.md), there shall be available to the [Administrator](/usc/42/4003.md?p=a-6) from the National [Flood](/usc/42/4121.md?p=a-1) Insurance Fund, of amounts not otherwise obligated, not more than $750,000 to carry out this paragraph.
- (d) **Disclosure of COASTAL Formula—** Not later than 30 days after the date on which a post-storm assessment is submitted to the [Secretary](/usc/42/242q–4.md?p=2) under [section 3611(b)(2)(E) of title 33](/usc/33/3611.md?p=b-2-E), for each indeterminate loss for which the COASTAL Formula is used pursuant to [subsection (c)(2)](#c-2), the [Administrator](/usc/42/4003.md?p=a-6) shall disclose to the policyholder that makes a claim relating to the indeterminate loss—
  - (1) that the [Administrator](/usc/42/4003.md?p=a-6) used the COASTAL Formula with respect to the indeterminate loss; and
  - (2) a summary of the results of the use of the COASTAL Formula.
- (e) **Consultation—** In carrying out subsections [(b)](#b) and [(c)](#c), the [Secretary](/usc/42/242q–4.md?p=2) shall consult with—
  - (1) the Under [Secretary](/usc/42/242q–4.md?p=2) for Oceans and Atmosphere;
  - (2) the [Director](/usc/42/11851.md?p=5) of the National Institute of Standards and Technology;
  - (3) the Chief of Engineers of the Corps of Engineers;
  - (4) the [Director](/usc/42/11851.md?p=5) of the [United States](/usc/42/4121.md?p=a-2) Geological Survey;
  - (5) the Office of the Federal Coordinator for Meteorology;
  - (6) [State](/usc/42/4121.md?p=a-2) insurance regulators of coastal [States](/usc/42/4121.md?p=a-2); and
  - (7) such public, private, and academic sector entities as the [Secretary](/usc/42/242q–4.md?p=2) considers appropriate for purposes of carrying out such subsections.
- (f) **Recordkeeping—** Each consideration and measure the [Administrator](/usc/42/4003.md?p=a-6) determines necessary to carry out [subsection (b)](#b) may be required, with advanced approval of the [Administrator](/usc/42/4003.md?p=a-6), to be provided for on the [National Flood Insurance Program](/usc/42/4004.md?p=a-4) Elevation Certificate, or maintained otherwise on record if approved by the [Administrator](/usc/42/4003.md?p=a-6), for any property that qualifies for the COASTAL Formula under [subsection (c)](#c).
- (g) **Civil penalty—**
  - (1) **In general—** If an insurance claims adjuster knowingly and willfully makes a false or inaccurate determination relating to an indeterminate loss, the [Administrator](/usc/42/4003.md?p=a-6) may, after notice and opportunity for hearing, impose on the insurance claims adjuster a civil penalty of not more than $1,000.
  - (2) **Deposit—** Notwithstanding [section 3302 of title 31](/usc/31/3302.md) or any other law relating to the crediting of money, the [Administrator](/usc/42/4003.md?p=a-6) shall deposit in the National [Flood](/usc/42/4121.md?p=a-1) Insurance Fund any amounts received under this subsection, which shall remain available until expended and be available to the [Administrator](/usc/42/4003.md?p=a-6) for purposes authorized for the National [Flood](/usc/42/4121.md?p=a-1) Insurance Fund without further appropriation.
- (h) **Rule of construction—** Nothing in this subsection[^3] shall be construed to require the [Administrator](/usc/42/4003.md?p=a-6) to make any payment under the [national flood insurance program](/usc/42/4004.md?p=a-4), or an [insurance company](/usc/42/4121.md?p=a-3) that issues a standard [flood](/usc/42/4121.md?p=a-1) insurance policy under the [national flood insurance program](/usc/42/4004.md?p=a-4) to make any payment, for an indeterminate loss based upon post-storm assessment, the COASTAL Formula, or any other loss [allocation](/usc/42/2021b.md?p=2) or post-storm assessment arising under the laws or ordinances of any [State](/usc/42/4121.md?p=a-2).
- (i) **Applicability—** [Subsection (c)](#c) shall apply with respect to an indeterminate loss associated with a named storm that occurs 60 days after publication of the COASTAL Formula in the Federal Register as required by [subsection (b)(1)](#b-1).
- (j) **Rule of Construction—** Nothing in this subsection[^3] shall be construed to negate, set aside, or void any policy limit, including any loss limitation, set forth in a standard insurance policy.
- (k) **Rule of construction—** Nothing in this section shall be construed to create a cause of action under this chapter.

## Footnotes

[^1]: So in original. Probably should be capitalized.
[^2]: So in original. Probably should be “paragraphs”.
[^3]: So in original. Probably should be “this section”.

## Source credit

(Pub. L. 90–448, title XIII, § 1337, as added Pub. L. 112–141, div. F, title II, § 100253, July 6, 2012, 126 Stat. 974; amended Pub. L. 116–271, title II, § 201(b), Dec. 31, 2020, 134 Stat. 3346.)

## Notes

### Editorial Notes

### Amendments

2020—Subsec. (a)(3). Pub. L. 116–271, § 201(b)(1)(A), inserted “, except that the term shall not apply with respect to a State or territory that has an operational wind and flood loss allocation system” before period at end.

Subsec. (a)(5). Pub. L. 116–271, § 201(b)(1)(B), inserted “sustained” after “maximum”.

Subsec. (b)(1). Pub. L. 116–271, § 201(b)(2)(A), substituted “publish for comment in the Federal Register” for “establish by rule”.

Subsec. (b)(2)(B). Pub. L. 116–271, § 201(b)(2)(B), inserted “, or other data or information used to determine a property’s current risk of flood, as determined by the Administrator,” after “Elevation Certificate”.

Subsec. (c)(3)(A)(i). Pub. L. 116–271, § 201(b)(3), substituted “publication of the COASTAL Formula in the Federal Register as required by subsection (b)(1)” for “the issuance of the rule establishing the COASTAL Formula”.

Subsec. (d). Pub. L. 116–271, § 201(b)(4), substituted “section 3611(b)(2)(E)” for “section 3611(b)(2)(C)”.

Subsec. (h). Pub. L. 116–271, § 201(b)(5), inserted “that issues a standard flood insurance policy under the national flood insurance program” after “company” and substituted “, the COASTAL Formula, or any other loss allocation or post-storm assessment arising under the laws or ordinances of any State” for “or the COASTAL Formula”.

Subsec. (i). Pub. L. 116–271, § 201(b)(6), substituted “60 days after publication of the COASTAL Formula in the Federal Register as required by subsection (b)(1)” for “after the date on which the Administrator issues the rule establishing the COASTAL Formula under subsection (b)”.

Subsec. (k). Pub. L. 116–271, § 201(b)(7), added subsec. (k).