General FAQ

My property is part of a community association. What do I need to know about flood insurance for community associations?

Flood insurance for community associations can be confusing. It is important not only to have it but also to have the right kind. There are six types of flood insurance that community associations and/or their residents may purchase:

Residential Condominium Building Association Policy,
Condominium Association Policy,
Standard Flood Insurance Policy – Dwelling Form,
Standard Flood Insurance Policy – General Property Form,
Preferred Risk Policy, and
Private flood insurance.

See the Flood Insurance Selection Chart in the National Flood Insurance Program’s Flood Insurance Guide for Community Associations to learn more about the first five types.

It is important when shopping for flood insurance to speak to an insurance broker who specializes in flood insurance and can walk your association and its residents through its requirements and options based on where its buildings are located, how many units are in each building, and how much your association wants to cover for its residents versus have its residents cover on their own. Some policies cover not only buildings and common areas but also individual units while others only cover the building and common areas and require residents to purchase their own flood insurance to cover their individual units. Additionally, coverage options differ between condominiums, planned communities and housing cooperatives; there are more options available for condominiums than there are for planned communities and housing cooperatives.

If a community association building is located in a Special Flood Hazard Area (SFHA), flood insurance is required. Not only can the community association be held liable for damage due to flooding that could have been covered if they had had flood insurance but also, by not purchasing flood insurance, it could impede the ability of its residents or potential residents to acquire loans and mortgages. You will want to make sure your residents understand what is covered under your community’s policy and what is not covered so they can make an informed decision about purchasing any supplemental coverage.

If you do an internet search for “flood insurance condominium,” a number of private flood insurance companies also have pages dedicated to explaining the intricacies of flood insurance for community associations.