Q:
I live in a high-rise condo at the beach. Do I need to buy flood insurance?
Answer:
It's always a good idea to purchase flood insurance to protect your insurable property, even if you own a condominium. Your homeowners policy (Form HO-6 for condominium owners) does not cover flood damage. The flood insurance policy owned by your condominium association doesn't completely protect you, either. It may cover the residential building, common areas, and even individual units, but it doesn't cover the contents of your unit: your furniture, carpets, art, electronics, clothing, furs, appliances, jewelry, valuables, and so on.
An individual unit owner's flood insurance policy covers your personal belongings and may provide additional building coverage for the unit in which you live. You might consider yourself high and dry because you live on the 26th floor, but when a flood washes away the entire first floor of your condominium building, your penthouse unit may end up at ground level, along with other flood-damaged dwellings in the area. And it may be wrong to believe that federal disaster assistance will cover your losses. In general, federal disaster insurance is available only if the president declares a major disaster. That occurs in less than 50 percent of all flooding incidents. And much of the available federal disaster relief is issued in the form of loans that must be repaid with interest.
Flood insurance is available through the National Flood Insurance Program (NFIP) and is sold by private insurance companies and agents. The federal government backs these stand-alone policies. You can insure your property if you live in a community that participates in the NFIP. Most communities with a serious flood potential have joined the NFIP. Policies are priced according to your level of risk. Be aware, however, that if your condominium at the beach was built after 1982 and sits within an area defined under federal law as part of the Coastal Barrier Resources System, then you can't purchase flood insurance. For more information, contact your insurance agent or call the NFIP at (800) 427-4661.