Flood Insurance for Condos
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Why Do You Need Flood Insurance on the 15th Floor?
Let a Flood Nerd Explain It All!
Condominium Association Flood Insurance
Flood insurance is pretty complicated stuff. And when you are in a Condo Association, it gets even trickier. But Flood Nerds are master magicians with Flood Master policies. Flood insurance is all we do, so we understand it better than most agents.
Let’s break it down for you.
The Board Members and Management Company are responsible for buying flood insurance for the Association. This insurance covers those parts of the building that are common to all unit owners.
This policy is called the Residential Condominium Building Association Policy (RCBAP) or sometimes people call it the Master Flood Policy or the HOA Flood Policy.
This type of insurance is pretty complicated, but you can get a bird’s eye view at our blog that’s written to explain flood coverage to Board Members.
How the RCBAP Protects You
Even if you are on the 15th floor, you still depend on the foundation, mechanical equipment like elevators (you aren’t taking the stairs to the 15th floor are you?), and common areas like the lobby.
Your Association buys a Hazard Insurance Policy to protect against damage from wind and fire. This policy protects the Association and unit owners from loss to the structure of the building and the common areas. Exactly what it covers is different from state to state.
What it won’t cover are the foundation and the mechanical equipment like boilers or elevators and they won’t cover damage from rising water – that means a flood.
The RCBAP protects you because you have an interest in these common elements. So, you always want to be sure that your Association buys the right amount of Replacement Cost Coverage for a flood loss.
I know it seems like a drag, but you really should pay attention to what is going on at those Condo Association meetings. When your Association either underinsures or doesn’t insure at all and you have a flood, then every unit owner will have to chip in and pay for the repairs.
Flood Insurance for Individual Condo Units
You probably have an HO6 policy for your unit. This policy covers your contents and living expenses if there is a fire, earthquake, or windstorm. But it doesn’t cover flood damage.
The RCBAP policy may cover flood damage to the individual units. If this is the case, then you just need to buy flood coverage for contents. This covers your clothing, TV, computer, furniture, household goods, and the personal items that make your condo home. If it isn’t attached to the building (like cabinets and flooring) then it is covered.
If your building isn’t in a high-risk flood area, you may not have an RCBAP and you are at a high risk of financial ruin if there is a flood.
That’s because you have an interest in the building. If there is a flood, and there isn’t flood insurance you are responsible for a portion of the repair cost, no matter where the damage occurs.
Find Out the Cost Difference Between Government and Private Flood Insurance