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NFIP Flood for Condo Owners - RCBAP Master and Personal Unit - YouTube
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one of the most confusing perils to
cover is flood especially for condos within
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718 because the National Flood Insurance
Program the NFIP as built and described
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by FEMA is not like your hazard policy it
is not like your general liability or
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other policies you might put together
it's described very specifically and
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doesn't follow statute as far as
coverages go to follow 7:18 so we have
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to understand the policy and then build
our program around it as opposed to
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understanding our risks and then
building our policies and programs
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around our risks so the biggest issue is
yes you should understand your zoning so
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that the NFIP who's actually going to be
setting the premiums and the rates
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they're going to use their zone Maps you
may have to get an elevation certificate
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depending on what zone you're in which
could actually end up being more
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favorable to you which is just the first
area where things get counterintuitive
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with flood for example if you are in a
high hazard area known as a special
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flood hazard area SFHA these are shaded
areas on flood maps and that could be a
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ve and AE
anything other than X those are known as
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special flood hazard areas you'll get an
elevation certificate you may find out
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that your building is built higher than
the floodplain which means you'll
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actually receive credit and could pay
less on the rate than in X's own the
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other important factor is just is
your lender going to be requiring it
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because you're in a high hazard area but
once you sort out the zone itself you've
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had possibly an elevation certificate
the next comes with what are appropriate
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limits and what's covered and what's not
covered and those are really combined
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because a hazard policy for a building
let's say might be 10 million dollars
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for example well the average flood
policy for a 10 million dollar building
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high-rise condo
or anything that's over four or five
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stories could be anywhere from 20 to 35
percent more for flood because the
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hazard policy one that only covers wind
or fire is only going to cover per 7:18
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which means drywall out is going to go
on the master policy it's also going to
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exclude foundations of a building flood
policy is going to include the
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foundation it's also going to include
dry wall covering paint floor covering
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carpet tile ceiling coverings it could
even they will even cover cabinets
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fixtures appliances and all of these
things are going to be excluded under a
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hazard policy under 718 but because this
is how the NFIP has written the
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residential condo building Association
policy RCBAP they're included which
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means the appraisal needs to reflect
that and have those higher like I
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mentioned 20 to 35% higher values this
is a good table showing those
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differences so on this side you'll see a
list of items that could be in an
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association and this will be the hazard
policy this red side and the unit owner
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responsibility which is going to include
the interior wall area of exterior wall
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including paint tile wallpaper it's also
going to include interior wall area floor
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coverings paint texture finishes though
they're all going to phone the unit
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owner under a hazard policy which means
it's going to go in a HO6 policy the
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individual unit owners have when it
comes to flood everything is marked
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under the master condo policy it doesn't
mean you don't need flood coverage if
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you're in the condo and you have a
master policy it means that you could
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need contents coverage so that's going
to be your clothes your TV your
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furniture anything that you can take out
of there that isn't really screwed down
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or nailed down you could still need or
want to buy flood coverage for but
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honestly the most important is that
building coverage which
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all falls on the master policy in the
NFIP matches at $250,000 per unit so if
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your hazard value is around $250,000 in
replacement costs per unit for as I
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mentioned hazard for flood it can easily
be 300 or more which means you have a
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deficiency or a gap in coverage unless
you have an excess policy so a lot of
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associations choose to buy excess
coverage which which could be a million
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to double the value of their current
coverages through this separate policy
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this secondary layer and that will
supplement that gap of all the
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additional coverages and the fact that
the NFIP can only offer $250,000 per
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unit and the biggest thing also with
flood that a lot of people don't realize
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is flood includes plugs the definition
of flood is rising waters and that
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includes storm surge so if we have storm
surge that picks up water from a
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hurricane 20 30 40 feet brings it inland
and causes damage which could include
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the foundations doesn't necessarily need
to flood the building and it get pulled
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away damaged the Foundation's in a way
that the building would have to be torn
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down and rebuilt and that's really the
biggest risk from a catastrophic
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standpoint that flood presents compared
to a possibility of just a little bit of
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water getting in the building
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