Georgia HOA & Community Association Law Resources

Flood Damage: Are You Covered?

Flood Damage: Are You Covered?

Given the deluge of rain Georgians experienced this summer, recent news reports of flooding and related images of swollen creeks and submerged houses may not come as much of a surprise.  What may come as a surprise, however, is that much of the severe flooding in Georgia this year occurred in mountainous North Georgia, an area that does not meet the typical description of a flat, flood-prone region.

This underscores an important point- that flooding can happen anywhere, to any of us, at any time.  In fact, flooding is the most common, and costly, natural disaster in the U.S.  Yet, as many homeowners learn too late, homeowner’s insurance policies DO NOT cover damages caused by a flood.  Instead, such coverage is available only by purchasing special “Flood Insurance”.   Flood insurance is widely available through the National Flood Insurance Program (NFIP), a program administered by the Federal Insurance and Mitigation Administration, which is part of FEMA.

Flood insurance can cover both damage to structures and contents.  There are two different policies that apply to structures in community associations.  There is the standard flood policy for single family detached homes and the Residential Condominium Building Association Property policy (RCBAP) for condominium units.

Both policies cover damage to the structure caused by a flood.  A flood is defined as general or temporary condition of partial or complete inundation of two or more acres of normally dry land or of two or more properties from overflow of inland or tidal waters; unusual and rapid accumulation or runoff of surface waters from any source; mudflow.  The maximum coverage is $250,000 for a detached house and $250,000 per unit in a multi-unit building.

A building policy does not cover contents.  Homeowners must purchase a separate policy.  The limit of coverage is $100,000.

How much a flood insurance policy will cost and its availability depends upon the location of the property and its flood zone classification. NFIP maps the nation’s flood plains and establishes flood zones based upon frequency of flooding.   It then makes determinations of whether flood insurance will be available for a particular area, and at what cost, based upon a “100 year flood.”

Contrary to popular belief, a “100 year flood” does not mean the flood that will occur once every 100 years.   Rather, if your property is in a 100 year floodplain, it means that in every given year there is a 1% chance of your property flooding.   According to NFIP, over a 30 year period (a typical mortgage), the 1% annual chance flood has a 26% chance of occurring.  If a federally prepared flood hazard boundary map (“FHBM”) shows that a property has a 1% per year chance of flooding, it is considered a special flood hazard area (“SFHA”) and is designated as Zone A on the map.  The NFIP then refines Zone A into various sub-categories for purposes of determining rates for flood insurance.

As the recent floods in mountainous North Georgia demonstrate, even if your property is not located in what is commonly thought of as a traditional “flood-plain” area, it may still be vulnerable to flooding.   In fact, according to the NFIP, people outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding.  So, even if you are not located in a high-risk area, if you are anywhere near a creek, drainage ditch, detention pond, etc., you should consider obtaining a quote for flood insurance.  Inasmuch as the premium for flood insurance is based upon the designation, the cost is very inexpensive for low-risk areas.  The NFIP reports that the average premium for a yearly flood insurance policy is only around $640.00.  You can purchase flood insurance policies from state-licensed property and casualty insurance agents who you deal with for other property insurance needs, or visit to locate an agent.