Flooded with Flood Changes? By Melissa Esham 3/24/2015 Changes haven’t stopped yet. Please keep reading. On April 1st the NFIP rate and fee increases will occur as policies renew. On July 16, 2015 our local area is experiencing map changes that go in effect. Currently, lenders are refining (a fancy word for changing) the requirements for flood insurance coverages. This is where it gets tricky. Condominiums are typically written on a policy called the Residential Condominium Building Association Policy or as it is referred to an RCBAP. The association purchases flood insurance on behalf of all units in the condominium association. Some associations, such as townhomes, only have units connecting from side to side. If an association did not have units sitting on top of one another they could leave the purchase of flood insurance to each individual owner. The owner would purchase an individual dwelling policy for their unit. This allowed units with out mortgages to forgo purchasing the coverage. Fannie Mae and Freddie Mac have adopted new policies that would stop this practice and all units that are of a condominium ownership will need to purchase the RCBAP coverage rather than individual dwelling policies. According to Insurance Agents & Brokers the new ruling states: Stand-alone flood insurance dwelling policies for an attached, individual condo unit are not acceptable. A master condo flood insurance policy must be maintained by the HOA. The HOA must obtain a RCBAP or equivalent private flood insurance coverage for each building located in an SFHA. The policy must cover all common elements and property, as well as each individual unit in the building. The master flood insurance policy must be at least equal to the lower of 80 percent of the replacement cost, or the maximum insurance available from the NFIP per unit (currently $250,000). Most of our condominium clients have purchased flood insurance on the building or the RCBAP through the NFIP. However, Atlantic/Smith, Cropper & Deeley will be taking a closer look at the policies of townhome style buildings to make sure this does not become a lender problem in the future. Thanks for reading. You deserve a high five for sticking with us.