Under what condition is RCV applied for building flood damage?

Replacement Cost Value (RCV) applies to building flood damage primarily when the property is a primary residence and has sufficient coverage. This means that the homeowners must have purchased a flood insurance policy that includes RCV terms, which allow for reimbursement at the cost to replace the damaged structure with a new one of similar kind and quality without deducting for depreciation.

For RCV to be applied, one important aspect is that the property must serve as a primary residence. This condition reflects the intention of flood insurance programs to provide additional support and help for homeowners who may face severe financial burdens due to flooding. Sufficient coverage typically refers to meeting the minimum insurance requirements set by the National Flood Insurance Program (NFIP) or having enough coverage to rebuild the home to its original condition.

In contrast, while rental properties, second homes, and commercially owned properties may also require flood insurance, they typically do not qualify for RCV in the same way as primary residences do under the standard terms of flood insurance policies. Thus, option C is correct as it encompasses the conditions required for RCV to be applicable for flooding incident damage.