The guest speaker for the Nov. 14 meeting of the Siesta Key Condominium Council proved quite popular, it appears from the minutes of that meeting.
Jeffrey Bajza, president of Ameriflood Insurance, addressed a variety of issues relating to condominium ownership.
For example, the minutes say, he reminded the members that condos are required by state statute to get a replacement value appraisal every three years. The initiative should produce one figure related to flooding and another regarding hazards, he said. Responsibilities of the association and owners differ, he pointed out. For example, electrical fixtures, appliances, water heaters and cabinetry are among the association’s responsibility in the event of flooding, but they are the owners’ responsibility in the event of a hazard. He distributed two handouts showing the details.
The NFIP (National Flood Insurance Program) provides a maximum of $250,000 per unit, Bajza said. Additionally, it will cover just the cost of bringing a unit back to the level at which it was originally constructed, he explained.
Owners who have flood insurance through the NFIP might want to purchase private flood insurance, using a $250,000 deductible, he noted.
From that point on, the minutes said, “there were so many questions that Jeff mainly departed from his presentation,” devoting the rest of his time to a question-and-answer session. Some highlights of those exchanges, follow:
- If a unit has less than $250,000 in damage, the difference cannot be applied to owner improvements.
- The Federal Emergency Management Agency (FEMA) oversees the NFIP. The NFIP was $25 billion in debt before Hurricanes Harvey and Irma struck during the summer.
- Damage from wind-driven rain is not covered by a flood insurance policy. It will be covered by a hazard policy if wind damage is part of that policy. Irma’s primary damage resulted from wind-driven rain. Flooding is characterized as “rising water.” The unit has to “get wet” from rising water to qualify for a claim. Damage to the unit from another source of water is not an event for which a flood claim can be filed.
- Hurricane insurance is part of the wind policy; it affects the deductible, usually in the 3% to 5% range.
- If a unit on the first floor endures more than $250,000 in damage, the excess may not be covered by the master flood policy of a complex, even if the upper floor units are unaffected. The association or owners may want to consider buying excess flood insurance.
- Mortgagors may require a complex association to purchase a policy providing coverage of $250,000 per unit or 100% of replacement cost, whichever is less, if the complex is located in certain flood zones.
- Impact glass and age/condition/design of the roof are important determinants of the insurance premium rating. To get credit for impact glass, every unit in the structure must have it installed.
- Flood-proofing ground-floor machinery (such as elevators and electrical systems) may earn insurance premium credits.
- Having an elevation certificate may help older complexes get better rates.
- Condos in the “V” zone should try to get re-classified to the “A” zone. This may result in a big reduction in premiums. The “V zone” is defined as “a coastal high hazard area that has a 1% annual chance of substantial flooding along with storm induced waves. The “A” zone is defined as “a special flood hazard that has a 1% annual chance of substantial flooding.”
- Owner excess flood policies may not be necessary for upper floor units unless a catastrophic collapse is feared.
- Purchase of private market flood insurance policies is on the rise nationwide; both condo associations and unit owners planning to purchase such insurance should consider getting a quote in the private market, as that market may offer better coverage at a better premium.
“INSURANCE IS A VERY COMPLEX MATTER. YOU SHOULD NOT RELY ON ANY OF THE ABOVE HIGHLIGHTS WITHOUT DISCUSSING THEM WITH YOUR INSURANCE CARRIER,” the minutes stressed.
The next Condo Council meeting will be held on Jan. 23, 2018. Typically, that session includes a presentation by the county commissioner representing Siesta Key, and it focuses on updates regarding county issues of interest to island residents.
Last year, Commissioner Alan Maio heard a slew of questions about controversial projects, including an effort to build a new hotel on the Key.