Most condo owners assume “the HOA has it handled” when it comes to floods. In reality, many associations only budget for the lender’s minimum master policy and routine maintenance. The gaps show up later as surprise special assessments, uncovered common-area damage and long arguments over who pays for what inside each unit. The walkthrough below focuses on the places where typical HOA budgets quietly fall short on flood risk, clean up and insurance – so owners can ask sharper questions before the next storm, not after.
- Condo and townhouse owners in HOAs.
- Board members and finance committee volunteers.
- Property managers who want fewer bad meetings after storms.
- Insured building and common-area damage.
- Uninsured or underinsured repairs and upgrades.
- Owner-level costs: unit interiors, contents and displacement.
- Master flood policy for structure and common elements.
- Reasonable reserves for known components like roofs and siding.
- High flood deductibles with no dedicated “storm fund”.
- Coverage limits that match loan rules but not real rebuild costs.
- Temporary housing, owner contents and lost rent.
- Code upgrades, drainage fixes and legal or engineering help.
Many condo associations carry a master policy that satisfies lender guidelines but leaves gaps between the coverage limit and a full rebuild budget. The declaration page can look impressive while still not matching the real replacement cost of garages, amenities and mechanical spaces.
- Rising construction and labor costs since the last reserve study.
- Ground floor build out, parking gates, lobby finishes and storage.
- Coinsurance penalties if the building is insured below a certain share of replacement value.
- Is our flood limit based on a recent replacement cost estimate.
- What share of a full rebuild would insurance actually cover on paper.
Documents often say the association insures “common elements” while unit owners insure “improvements and contents”. After a flood, arguments start over whose policy should pay for drywall, flooring, cabinets and upgrades. The answer sits in the declaration and bylaws, not in the adjuster’s preference.
| Item | Often treated as | Where to confirm |
|---|---|---|
| Structural walls, roof, foundation | Association responsibility. | Master deed and insurance sections. |
| Interior drywall, paint, flooring | Depends on “bare walls” or “all in” language. | Bylaws and condo rider in owner policies. |
| Owner upgrades and finishes | Usually owner responsibility. | Owner flood and condo policies. |
Even with good coverage, high flood deductibles and uncovered items often become a special assessment. Owners are rarely told what that number might look like per unit until after claims are filed.
- Flood deductible amount for the building, not just per policy.
- How the board plans to pay it: reserves, credit line or assessment.
- Any exclusions that would trigger extra owner cash calls.
If board members cannot easily say what a “typical” flood assessment might be for one unit under a realistic scenario, they probably have not walked through the math.
Flooded elevator pits, electrical rooms and fire pumps can close an entire building even if individual units are dry. Replacement parts, inspections and re commissioning often run far beyond routine line items.
- Where are the main electrical panels, telecom equipment and pumps relative to flood entry points.
- Have contractors ever proposed raising or protecting these systems and was cost the only reason not to.
- Is there a reserve item for elevator modernization or flood hardening, not just routine service calls.
Basements, tuck under parking and storage rooms are natural sumps. They often hold sprinklers, building controls and owner belongings. Some master policies limit coverage for contents in common areas, and many associations treat garage drains, trench grates and backflow valves as “nice to have” instead of critical.
- Is there a schedule for cleaning and inspecting garage drains and sump pumps.
- Do storage areas have any flood protections or are they simply “at your own risk”.
- Are improvements like flood logs or barriers at garage entries ever discussed in reserve planning.
Boards often assume insurance will fund dry out crews, engineering reports and legal help. Policies may cover parts of that work, but many professional fees, code upgrades and debris hauling fall back on the association. Owners also face their own costs for temporary housing and alternative parking.
- Add a “disaster services” placeholder in the budget for consultants, legal review and communication tools.
- Discuss ahead of time how the association would prioritize scarce funds if insurance is delayed.
- Clarify what the association can and cannot pay for regarding owner displacement and vehicles.
It is easier to talk about numbers when “flood risk” is broken into specific buckets. This table helps translate common blind spots into questions your board or property manager can actually answer.
| Hidden issue | Where it should show up | A concrete question to ask |
|---|---|---|
| High master policy deductible | Reserve study and insurance note in the budget. | If we had a flood equal to the deductible, how would we pay our share per unit. |
| Elevator and fire system downtime | Capital plan for modernization and relocation or protection. | Have we costed out what it would take to get elevators and fire systems back after a ground floor flood. |
| Owner unit and contents gaps | Clear owner guidance and suggested coverage ranges. | Do we give owners a simple one page summary of what the master policy does and does not cover inside units. |
| Drainage and garage water entry | Maintenance calendar and small capital improvements list. | When was the last time we camera inspected drains or priced basic flood barriers for garage entries. |
This simple tool shows how unfunded flood repairs convert into per unit assessments today and how much an ongoing “storm reserve” could have softened that hit.
When owners hear that “the HOA has a master flood policy”, it is easy to assume the building, the budget and their own unit are protected in full. In reality, master policies, reserves and documents each cover a slice of the problem. The real blind spots tend to be deductibles, replacement cost gaps, ground floor systems and owner level costs that never appear in the association budget. Treating those as specific line items and questions rather than vague fears gives boards, managers and owners a better chance to plan together before water ever reaches the lobby.
