How to Explain RCBAP Flood Insurance to Your Condo Association
What Condo Board Members Need to Know About Flood Insurance (RCBAP)
“R-E-S-P-E-C-T find out what it means to me”……sings Aretha before the “sock it to me sock it to me sock it to me”. Sure, you may know R-E-S-P-E-C-T but if you don’t know R-C-B-A-P a flood can sock it to your entire building, the Condo Association, and residents.
As a Condo Association Board Member (President, Treasurer, or Secretary) it’s your responsibility to protect the building. But that’s not easy when it comes to flood insurance.
That’s why you need a Flood Nerd to help you understand the coverage so you can explain it to your community.
Good thing you are here, I’m Robert Murphy the Official Flood Nerd and I’m going to explain flood insurance for condo associations. It is one of the most misunderstood categories of flood coverage and most agents don’t truly understand it themselves. But I’m not most agents. All I do is flood coverage: no car insurance, no life insurance, no fire insurance. I’m a total Geek on flood insurance and I’m going to explain what you need to know as a Condo Association Board Member.
Let’s start with when the Condo Association flood policy is required for the building (as opposed to an individual condo policy).
When RCBAP Is Required
A Residential Condominium Building Association Policy (RCBAP) is the name of the flood insurance policy written on Condo Association buildings by FEMA through the government National Flood Insurance Program (NFIP).
Wow! That’s a mouthful of alphabet for sure. But we nerds do love our acronyms!
In a North Carolina court case (Porter versus Beaver Dam Run) the courts ruled that when a condo association is required by state law to maintain insurance “against all risks of direct physical loss commonly insured against,” so long as the insurance is “available,” then if flood insurance is available through FEMA and the building is in a high-risk zone, the association must purchase protection.
Sounds like common sense, right? But until this ruling in 2018, this was a common question with no clear answer.
See your standard hazard policy, general liability, or other such policies you might have as a Condo Association don’t cover losses due to a flood. Only flood insurance can do that.
If you are in a high-risk flood zone, the association must purchase flood insurance. If you are in a lower risk zone, you should purchase flood insurance because flood damage is a financial catastrophe just waiting to happen. It all boils down to the location of the buildings.
Understanding Flood Maps
Those FEMA folks work with the Army Corps of Engineers to create maps for every geographic area of the United States. These maps are supposed to be updated every few years, but it’s a government operation so there are some maps that date back to the ’70s!
The flood map determines if you are in a risky flood zone. High-risk zones are called A or V flood zones and of course, there are AE and VE zones too. Because you know acronyms!
Take a look at this sample map of a special flood hazard area (SFHA).
Determining flood zone isn’t so simple, is it?