Master Flood Insurance for Condominium Association & RCBAP Flood Insurance
Flood Insurance for Condominium Associations
There are several methods of insuring condominiums of which many can provide substantial savings in cost. Be sure to work with a flood expert the Crestway Group who is knowledgeable in the alternative low-cost flood insurance market
Condominium Association Flood Insurance
As a corporate entity HOA board member or management company or owner of a unit in residential condo community. The Board is responsible for the management and operation of a condominium and has legal duty to ensure the best coverage at the best price for the community. The Board of Directors can be held personally liable for not acquiring the right coverage. Rules flood insurance regarding HOA’s and Master Flood policies have changed. If the community is located in high-risk flood zone soon the community will be faced with some challenges regarding flood insurance.
Condominium Associations, in a Regular Program community, can purchase flood insurance coverage on a residential building and its contents under a Residential Condominium Building Association Policy (RCBAP). In addition to providing coverage for residential condominium buildings without imposing the burden of purchasing individual policies for each unit, the RCBAP expands the eligibility requirements to include all types of residential condominium buildings owned by the association, including:
- Garden apartment-type construction
- Townhouses
- Rowhouses
- Single-family detached buildings owned by the associations
- Fee interest timeshare buildings
What is an RCBAP?
The acronym of RCBAP stand for Residential Condominium Building Association Policy form this is the government flood insurance policy and the only way to accurately write flood insurance for condominium community associations, it can also be called a Master flood policy or HOA flood policy. Some of the parameters that affect whether or not an RCBAP flood policy is a correct type of policy for your association. This policy takes into account the building (each building needs to have it own policy) and seventy-five percent or more of the building must be for residential use. Is a master flood insurance required for a condo unit or just the association? If the building is in a High-risk flood zone (even if partially in), and this is usually determined when a lender pulls a Flood Zone determination (FZD) then a lender will require a master flood insurance policy for you to either sell your unit or buy a unit in a Condominium community.
Building Coverage
Building coverage is provided on a replacement cost basis. A co-insurance clause requires the condominium association to insure its building to at least 80 percent of the replacement cost value, in order to avoid uninsured losses. Cost-effective flood insurance protection is provided by insuring all units in a condominium building under a single policy requiring only one deductible, creating cost savings for unit owners.
Other Major Benefits
The Residential Condominium Building Association Policy is a master flood insurance policy issued to residential condominium associations. Subject to its conditions, limitations, and exclusions the RCBAP is designed to insure both common individually owned building elements. Coverage for commonly owned contents can also be purchased that have the following elements:
- Offers a high limit of coverage.
- Building —Full replacement cost of the building.
- Contents — $1,000,000 or the actual cash value, whichever is less.
- Assists unit owners with mortgage insurance requirements.
- Provides greater protection against liability issues to condominium associations and board members.
- Allows condominium associations to comply with by-law property insurance requirements.
30-Day Waiting Period
There’s typically a 30-day waiting period before the policy goes into effect. Don’t to wait until a storm is coming or the rivers are rising before thinking about flood insurance — by then it’s too late.