Expensive Flood Insurance Raises Common Fees Too High!


E.R. from New Haven County writes:

Dear Mister Condo,

Because of some people with high mortgages and/or second mortgages we had to purchase extra flood insurance. Now that the fee has gone up over 100 dollars more, no one can sell. We get nothing for it, no amenities, no pool, nothing at all. What can be done?

Mister Condo replies:

E.R., your community is not alone in its need to purchase flood insurance although I question your reasons as to why the flood insurance is needed. Connecticut was particularly hard hit when the Federal Emergency Management Agency (FEMA) remapped the country following the flooding in New Orleans during Hurricane Katrina. Many properties that were previously deemed relatively safe from flooding were reclassified to highly likely to flood. There are a myriad of reasons for this but the bottom line is that condominiums that are situated in a flood zone have little alternative when it comes to providing flood insurance. State law is largely interpreted that if the property is in a flood zone, the association should provide the flood insurance. Increased flood insurance costs are passed along in the form of increased common fees. Increased common fees can cause hardships to those unit owners looking to sell. However, any buyer looking to take a mortgage to purchase a condo that is in a flood zone would need to purchase the flood insurance separately if it wasn’t provided by the association. The exception might be the cash buyer who does not see the need for flood insurance to protect his or her investment. It is a tricky situation at best and you really can’t blame the association for providing insurance that FEMA recommends. Heaven forbid that your property were to experience flood damage and not have the proper insurance in place. That could be truly catastrophic to all unit owners. All the best!

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