Sump Pump
Exploring the Options for Condominium Flood Insurance
Floodwaters do not discriminate; those living in condos are at risk in the same way as those living in detached homes. In order to protect your home from water damage, residents and homeowner’s associations or condominium corporations should have condominium flood insurance in place. There are two kinds of flood coverage for condominiums:
Building
coverage for the structure and common areas (for owners of a condo complex
or for the condominium association)- Contents coverage for items inside the condo, from furniture and décor articles to clothes and personal possessions (for residents of a condo)
Who Is Responsible
for Each Type of Coverage?
The responsibility
of obtaining and holding condominium flood insurance depends on how the
ownership is set up and where the complex is located.
If the development has been backed by the Federal Housing Administration (F.H.A.) and is located in a flood zone, the Homeowner’s Association (HOA) is entirely responsible for insurance coverage of the buildings and common areas. They must provide proof of insurance before financing and other legalities can be approved. The HOA is also responsible for flood insurance in cases where the condo residents are strictly tenants. The building owners must obtain insurance to cover the structure and building components.
In all cases, every resident of each condo unit is responsible for his or her own content coverage. They need to obtain an individual insurance policy that will be based on the value of the items they wish to insure.
How Important is Location?
For those living
in a condominium located in an area that is considered to have a low to
moderate risk of flooding, the rates are often cheaper than for those
living in high-risk areas. This preferred rate is usually one of the lowest
on the market and can be purchased in a package covering both building
and contents.
For those living in high risk areas, the standard rate will apply, and obtaining the condominium flood insurance coverage may not be an option for them. Lenders generally insist on this type of coverage, especially those that are federally regulated. Most building and contents insurance coverage offered in areas of high risk is sold separately.
How Are Condominium
Flood Insurance Rates Calculated?
Insurance coverage rates vary based on property factors. Calculations
are similar to those of single family dwellings and business policies,
but also take into account particular features of the condo complex. The
rates for flood coverage typically depend on the following factors:
- Age of the building
- Location of the condo complex
- Number of units in the building and the overall occupancy
- Amount of deductible and overall insurance coverage required
- Location of possessions within the complex
- Number of floors and the location of the first floor in relation to flood levels in the area (this last factor may apply only to newly built complexes)
What Is the Best Way
to Obtain Condo Flood Insurance?
The first step
is to contact an insurance agent with information relevant to the above
factors in order to find out the cost of your premium. The National Flood
Insurance Program (NFIP) offers a quick risk profile to help you determine
an estimated cost. They can also provide you with a list of agents in
your area.
Condominium flood insurance is essential for those in high risk areas, and an important consideration for all residents, regardless of location. Statistics indicate that 25 percent of flooding occurs in areas considered from low to moderate risk levels. Hence, give yourself some peace of mind by protecting your home and possessions against water damage by acquiring condo flood insurance.
Learn how important sump pump drainage is to the protection of your home.
