Which statement about flood insurance for a community association is true?

• A. It is available through the National Flood Insurance Program for buildings in a flood plain and may require full insurable replacement cost or up to $250,000 per unit.
• B. It is always included in standard property insurance without additional cost.
• C. It covers only the building, not contents.
• D. It is available through private insurers regardless of location.

Answer: (A)

Flood insurance for a community association is typically obtained through the National Flood Insurance Program for buildings that lie in a flood-prone area, and the coverage can be aligned with the building’s insurable replacement cost, up to certain limits (often described as up to $250,000 per unit for a condo/HOA structure). This reflects how NFIP policies are designed to insure the actual cost to rebuild the covered structure, within the program’s limits, and to address the needs of multi-unit associations.

This is the best answer because it accurately describes the standard path (NFIP) and the common limit structure that may apply to a building within a flood plain, which is distinct from a generic, automatically included property policy. Flood insurance is not automatically included in standard property insurance and typically requires a separate policy or rider. It can also cover contents if the policy is written to include them, not just the building, and while private insurers exist, flood coverage is not universally available through private insurers in all locations or situations—NFIP remains the primary mechanism in many cases.