Flood Insurance implications for Pre-FIRM waterfront

I absolutely love living a Pre-FIRM waterfront high rise condo community in Maderia Beach Florida on Boca Ceiga Bay. The community was built in the early 70's, so we have ground floor units in every building and the club house is ground level as well. I overheard administration office personnel saying that their current insurer for the community was essentially looking for reasons not to insure us (aluminum wiring - that we don't have, etc.). We are AE flood zone with a BFE of 10'.

We already had a slight increase in HOA fees this year to cover higher flood insurance costs. We have about 900 units in our community, so it's easier to spread the costs around.

My concern is, being Pre-FIRM, will flood insurance become difficult, if not impossible, to obtain for our community in the future?

To my knowledge, we've only had minor flooding in a couple of buildings in the 80's. My fear is that we're one hurricane, insurer cancellation or FEMA change away from financial peril.

Thanks for the reply. I would love to hear from someone in a Florida pre-FIRM building and / or complex who has experienced one or more flood losses.

Here's the scenario I fear the most (and very nearly happened to us when Irma was coming straight for us and veered east at the last minute):

A tropical storm or hurricane causes a 10-15' storm surge, inundating the ground floor units causing slight flood damage in the 2nd floor units and destroying the 50+ year old elevators in each building. As I understand it, FEMA requires houses or buildings to be brought up to current / post-FIRM compliance (not just fixed) if the damage exceeding 50% of the value of the structure only. I don't think our building, or most of the other 8-12 story buildings in the complex would require a compliant fix, but our clubhouse and a shorter 3 story condo building would.

What possible scenarios would play out for the 3 story building, the clubhouse, and going forward, the ground floor units and second story units that were damaged? I think our flood policy could possibly cover demolishing the clubhouse and building a new compliant one, but having sustained a substantial loss, would the 1st and 2nd floor units become prohibitively expensive, or even impossible to insure? Would the HOA have to buyout the owners of the 1st and 2nd floor units if they are deemed un-insurable / uninhabitable? Would the 3 story building have to be demolished / abandoned and the HOA buy those owners out as well?

Thoughts?

Discussions regarding Real estate affected by climate risk in is a hot topic now for money managers world wide, primarily the growing aversion to risk exposure for insurers and mortgage lenders.

I found a discussion about condos in Significant Flood Hazard Areas (SFHA). The primary conversation revolves around financing options (or lack thereof) for condos in flood zones.

https://www.allpropertymanagement.com/resources/ask-a-pro/posts/refinance-my-condo-in-fema-flood-zone/

About half way through the article, a war game scenario lays out what could happen:

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The Importance of Flood Insurance

Wargame the situation through a bit: If Joe insures his condo, but Jane next door doesn’t insure hers, and there’s a flood, and Jane can’t repair the damage on her side of the wall, because she can’t afford to, Joe’s property values will be substantially negatively affected.

Furthermore, suppose Joe and Jane both cover their own units individually, but the board never secures coverage for the common areas. (or is under-insured) The pool area, weight room, lobby, and administrative office are submerged in a flood.

At best, the board of directors would have to enact a massive assessment to raise money to repair the damage. Many condo owners won’t be able to afford it. The burden would be borne by a few unit owners with the liquidity to come up with the cash – if then – and they’d probably sue the others for failing to pay their assessments!

What would happen to the value of the property in the interim? It would be a disaster.

For this reason, Fannie and Freddie won’t touch a condominium unit unless flood insurance was in place for all units and the common areas. I wouldn’t, either.

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Currently our HOA not only doesn't require owners to carry flood insurance, they don't require owners to carry ANY insurance whatsoever. I find this very troubling. They have a flood policy for the common areas, but I need to see how much it's for and what is covered.

You know this for a fact?