Many of our clients, who are members of a condo association and or own a condo unit, ask us if they need a flood insurance policy for condominiums. The answer is definitely yes, but it tends to be a bit complicated due to the fact that both the condo association and individual unit owners may be responsible for the flood insurance for condominiums policy. Here’s how it works. The condo association is responsible for purchasing a flood insurance policy that covers the parts of the buildings that are located in the common areas. That includes the exterior of your unit.

This is called a Residential Condominium Building Association Policy or Master Flood Policy, or a HOA Flood Policy. You may not have a HOA flood policy in place unless your condo complex is in a high-risk flood zone. However, if there happens to be a flood, which often happens outside of high-risk flood zones, then your condo association could very well be facing financial ruin. In fact, individual unit owners could very well be facing financial risk because they are responsible for a portion of the repair costs.

For example, if there are ten (10) units in the complex, and a flood causes $250,000 worth of damage to the common areas, each unit owner is responsible to pay $25,000 if there isn’t a master flood policy in place. Individual unit owners are responsible for purchasing a flood insurance policy that covers the interior of the unit, and the contents inside the unit. In essence, an individual condo owner’s flood insurance policy covers your clothes, electronics, furniture, and other personal items that are damaged or destroyed if the unit floods.

It also covers the cost to replace the cabinets, flooring and other fixtures that are damaged or destroyed if the unit floods. Here’s an interesting statistic. 25% of all flood related claims occur in areas that are not considered to be high-risk. Are you willing to take a 1 in 4 chance. If your condominium complex is not in a high-risk area, your lender probably didn’t require you to take out a flood insurance policy on your individual unit. However, that certainly doesn’t mean that you’re not at risk for a flood. Just imagine how much you would lose if that happened?

If you are a member of a condo association and or own a condo unit in the Commonwealth of Massachusetts, then you need to ensure that you have the proper insurance coverage in place. We can help you get the best deal on all of your personal and or business insurance needs.  Please consult with a professional insurance agent that can answer your questions about all insurance related topics. It is important to fully understand exactly what you are buying when it comes to insurance policies.

If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options. We look forward to helping you with all of your personal and or business-related insurance needs now and in the future.