Unit-Owner Claim vs. RCBAP Claim

Unit Owner
RCV Unit: $130,000.00
Building Coverage: $125,000.00
Building Coverage Deductible: $5,000.00
Unit Flood Damage: $47,065.05
Less Depreciation: $5,017.60
Building Claim after depreciation and deductible: $42,047.55

RCBAP - RCV Condominium Building
RCV Condominium Building: $1,000,000.00
Building Insurance Carried: $500,000.00
Building Insurance Required: $800,000.00
RC Loss (before deductible): $235,325.25
Building Deductible: $10,000.00

A graphic of a folder with the words, Case File, written on the cover.

Building Insurance Carried ÷ Building Insurance Required × RC Loss – Building Deductible = RCBAP Maximum Claim Payable

$500,000.00 ÷ $800,000.00 × $235,325.25 = $147,078.28

– $10,000.00 = $137,078.28 (RCBAP Maximum Claim Payable)

There are 5 units. Unit-owner claim in this building = $42,047.45 after application of depreciation and deductible. RCBAP claim after application of co-insurance and deductible = $137,078.28. Divided by 5 units = $27,415.66. In this Case File, we see that the unit flood damage is greater than the RCBAP claim payment (as broken down for 5 units).

Adjuster's Note: See NFIP Claims Manual, Section 2: Claims Processes and Guidance 8. Condominium Claims Handling, which states in part: “Section 1312 of the National Flood Insurance Act (42 U.S.C. § 4019), as amended by section 100214 of the Biggert-Waters Flood Insurance Reform Act of 2012 (BW12), prohibits the NFIP insurer from denying a payment requested by the condominium unit owner, who has building coverage under the Dwelling Form, when covered damages under the Dwelling Form are not payable under the association’s RCBAP due to policy limits or the application of coinsurance.”… Allowing “the Dwelling Form to respond as if the RCBAP coverage is exhausted. In all other cases, the RCBAP will continue to be primary, and the Dwelling Form will act as an excess flood insurance policy.”