Should I buy flood insurance?

[Douglas T.]

I will be closing on my condo in FT Lauderdale in just under 4 weeks.  It looks like my condo assoc. has wind insurance.  I will be on the 2nd floor.  Do I need flood insurance?  The property is 2.73 miles from the ocean.

[Robert Murphy]

@Douglas T.

If your condo community is an association then I would assume the Bylaws address the issue of insurance. If the property is in a High-Risk Flood zone then the HOA would buy flood insurance for the building(s) and the cost will come out of your fees. This is called a Master policy. If you are getting a loan and it and the property is in the High-Risk flood zone your lender may required you to have flood insurance. If the Master policy is insured correctly then this should satisfy your lender, however, if the association has chosen to cut corners and is not fullying ensuring the property/building then your lender might require you to purchase flood insurance to balance the requirements of the loan. This can get really technical however let's say that the HOA decides to have flood coverage for the building that is coverage for the building of about 200K per unit. Your loan for your unit is more than $250,000 (which is the Max your lender will likely require) they could ask you to cover the $50K. It would be a good idea to see how they are covering the building for flood and all other insurance because you are owning a % of the building however each unit owner is responsible for the whole building and that is why Even if you are in the Penthouse you will likely have to pay for the portion of the flood insurance, even if your individual unit is less likely to flood everyone in the community is responsible for the damage (any damage) to the building.

Now to that point if the building is covered you may be interested in a Walls in policy which will cover anything that is within the unit that could get damaged due to flooding (normal homeowners policies omit flood) so you will need a flood policy to cover anything that comes from a flood. 

Great question. Keep them coming.