For Gulf Coast community associations, flood insurance isn’t optional — it’s essential. And for many associations, the National Flood Insurance Program (NFIP) policy they carry provides coverage that falls far short of their actual exposure.
NFIP limits for associations
The NFIP’s Residential Condominium Building Association Policy (RCBAP) provides building coverage up to $250,000 per unit in the association (not per building). For a 100-unit condominium building, that’s up to $25M in aggregate building coverage. Sounds adequate — until you consider that a modern 100-unit mid-rise or high-rise in a coastal Florida market may have a replacement cost value of $40M, $60M, or more. The NFIP cap creates a coverage gap that can run into tens of millions of dollars.
Contents coverage for common areas (furniture, equipment, fixtures in lobbies, clubhouses, fitness centers) is limited to $100,000 per building under the RCBAP. For a building with a furnished lobby, equipped fitness center, and business center, actual common area contents may far exceed this limit.
The private flood market
Private flood insurance carriers have grown significantly in Florida and across the Gulf Coast over the past several years. These carriers can offer limits above NFIP caps, often with more favorable terms — broader coverage definitions, replacement cost settlement (NFIP pays on ACV basis for contents), and in some cases lower deductibles. For associations where NFIP limits are inadequate, a private flood policy can fill the gap either as a standalone policy or as excess flood coverage above the NFIP layer.
Not every private flood carrier writes in every zone or for every building type. And the private flood market’s pricing and availability can shift. Working with an agent who understands both the NFIP program and the private flood market is important for structuring the right combination.
Flood zone considerations
Your flood zone designation (AE, VE, X, etc.) affects both your NFIP premium and your private market options. Elevation certificates, flood mitigation improvements, and building design all factor into how carriers evaluate your risk. Associations in VE zones (coastal high hazard areas) face the most restricted market and highest premiums. Associations in X zones (minimal flood hazard) often skip flood coverage entirely — which is a calculated risk that boards should make consciously, not by default.
What boards should be asking
What are our NFIP coverage limits and how do they compare to our building’s replacement cost? Would excess or private flood coverage close the gap, and at what cost? When was our elevation certificate last updated? Are there flood mitigation improvements we’ve made that aren’t reflected in our current rating?
Common Elements will specialize in flood insurance placements for Gulf Coast associations — including both NFIP and private market options — when we launch. Join our waitlist.