If you own a condo unit, you might assume the association’s insurance has you fully covered when it comes to flood damage. Many condo owners — especially those living on upper floors — believe they don’t need their own condo flood insurance policy. That assumption could end up costing you thousands of dollars.
The truth is, condo unit owners should strongly consider purchasing a dwelling flood policy that includes both contents coverage and building coverage. Here’s why.
What Does the Condo Association’s Flood Policy Cover?
Most condo associations carry a Residential Condominium Building Association Policy, commonly called an RCBAP. This policy is written on the entire building in the association’s name and is available when at least 75 percent of the floor space is residential.
The maximum coverage available under an RCBAP is $250,000 multiplied by the number of units — or the building’s replacement cost, whichever is less. So a 10-unit condo building could carry up to $2.5 million in building flood coverage.
The RCBAP includes an 80 percent coinsurance requirement. If the building is insured to at least 80 percent of its replacement cost, flood losses are paid on a replacement cost basis. Fall below that threshold, and a coinsurance penalty kicks in.
One important detail: the RCBAP covers all building items regardless of who installed them or when. That includes paint, cabinets, wallpaper, appliances, air conditioning units, and even newly installed interior walls. Unlike Florida’s condo statute (718.111), the National Flood Insurance Program is not bound by state law — so the RCBAP’s building coverage is broader than many people realize.
So Why Would You Need Your Own Flood Policy?
If the RCBAP is so comprehensive, why bother with your own policy? Two big reasons: controlling your own condo flood insurance coverage and protecting yourself from loss assessments.
1. You Control Your Own Protection
When you rely solely on your association’s flood policy, you’re trusting someone else to maintain your insurance. What happens if the board decides not to renew the RCBAP? Will every unit owner be notified? Probably not.
That means you could be living with zero flood coverage on your building items without even knowing it. By purchasing your own condo flood insurance with building coverage, you take control of your protection. In many cases, the cost for building coverage is only a few hundred dollars per year — and having overlapping coverage is far better than having none at all.
2. Loss Assessment Protection
This is where things get really important. If your condo building suffers major flood damage and the RCBAP doesn’t fully cover the repairs — or worse, there’s no RCBAP in place — the association can assess each unit owner for their share of the cost.
Here’s the catch: your HO-6 homeowners policy won’t cover a flood-related assessment because flood isn’t a covered peril under that policy. The only way to cover a flood damage assessment is through your own condo flood insurance — specifically, a dwelling flood policy with building coverage.
When you select a building coverage limit on your dwelling flood policy, that limit also serves as your loss assessment limit — and there’s no deductible on loss assessment claims.
What Loss Assessments Are Covered?
Your dwelling flood policy can cover assessments in situations like these:
- The RCBAP was written for at least 80 percent of the building’s replacement cost but less than 100 percent, leaving a gap in coverage after a major flood loss.
- There was no RCBAP in place at all when the flood occurred, and the association assesses unit owners for the full repair cost.
- A non-covered building — like a standalone clubhouse without its own flood policy — is damaged, and unit owners are assessed for the repairs.
- The association’s RCBAP was written through a private insurer rather than through the NFIP.
However, not all assessments are covered. Your policy won’t pay for assessments related to the RCBAP deductible, damage to personal property owned by the association, or situations where total payouts across all policies exceed $250,000 per person for a single building.
Understanding the $250,000 Per-Person Limit
Here’s an important nuance. The NFIP caps total payouts at $250,000 per unit in a condo building. If the RCBAP pays out its maximum and the association still assesses unit owners for additional costs, your dwelling flood policy won’t cover that assessment if you’ve already received your $250,000 share through the RCBAP.
Does that mean you shouldn’t buy condo flood insurance? Absolutely not. The real risk isn’t an RCBAP paying out its maximum — it’s the RCBAP not being in place at all, being underinsured, or lapsing without your knowledge. Your own policy is your safety net for those scenarios.
This Applies to Every Floor — Not Just Ground Level
Whether you live on the first floor or the fifteenth floor, loss assessments apply to every unit owner in the building. Flood damage to common elements or the building structure gets shared among all owners. Your floor doesn’t exempt you from your financial responsibility, which is why condo flood insurance is essential for every unit owner.
Common Myths About Condo Flood Insurance
Unfortunately, there are several misconceptions that continue to circulate among condo owners and even some insurance professionals. You may have heard claims like “a condo owner should never buy building flood coverage” or “there’s no loss assessment coverage available for condo units.” These statements are simply incorrect.
There are very real situations where your own building flood coverage will respond — and when it does, you’ll be glad you had it.
The Bottom Line on Condo Flood Insurance
Condo flood insurance isn’t just for ground-floor units. Every condo owner should consider purchasing a dwelling flood policy with building coverage to protect against loss assessments and gaps in the association’s coverage. The cost is often minimal — just a few hundred dollars a year — but the financial protection it provides can be substantial.
If you’re a Florida condo owner and want to make sure you’re properly covered, get a free quote from Cornerstone Insurance today. Our licensed Florida agents specialize in helping condo owners find the right flood coverage at the best price.
