Several types of insurance coverage that may apply to Florida condos, including:
Condo Association Property and Windstorm Insurance: This type of insurance is typically purchased by the condo association and covers the common areas and exterior of the building. It may include coverage for property damage and liability.
Personal Property Insurance: Condo owners should consider purchasing personal property insurance to protect their belongings inside the unit. This type of insurance may cover damage or loss due to theft, fire, or other covered events.
Liability Insurance: Condo owners may also want to consider liability insurance to protect themselves in case someone is injured in their units.
It's important for condo owners to review their condo association's insurance policy to understand what is and isn't covered. They should also consider purchasing additional coverage as needed to fully protect their property and assets.
A Florida condo insurance property appraisal estimates and reports the replacement cost of condo association buildings and improvements. Generally, a good appraisal report shows a list of every building and improvement along with the replacement cost for each item in the list.
Generally, insurance carriers request an insurance appraisal report before quoting insurance policy premiums.
Florida Statutes 718.111(11) shows "(a) Adequate property insurance, regardless of any requirement in the declaration of condominium for coverage by the association for full insurable value, replacement cost, or similar coverage, must be based on the replacement cost of the property to be insured as determined by an independent insurance appraisal or update of a prior appraisal. The replacement cost must be determined at least once every 36 months."
Sometimes condo association governing documents require an update of the insurance appraisal more frequently than every 36 months.
You may note that the section of Florida Statutes that appears above shows ".... as determined by an independent insurance appraisal ..." Appraisals are performed by individuals or companies in the business of selling appraisal services.
The 2018 article Insurance Appraisals - You Get What You Pay For published by the Florida Community Association Professionals shows that:
It should be noted here that the Florida Department of Business and Professional Regulation, Real Estate Appraisal Board, does not consider a property insurable value report to be an appraisal of real estate for appraisal licensing purposes; there is no state requirement for age, education, or experience, nor is any license or certification given or needed for this activity. Therefore, consumers should be aware that there are or may be unqualified individuals or companies soliciting for this business.
The Florida property insurance crisis for condos refers to the situation in 2021, 2022, and 2023 in which many condominium associations in Florida faced significant increases in property insurance premiums and a reduction in the availability of coverage.
Some property insurance companies have faced challenges and have been forced to leave the Florida market. One of the main reasons is the frequency and severity of natural disasters such as hurricanes, floods, and wildfires in Florida. These disasters have caused significant property damage, leading to substantial insurance claims and losses for insurers.
Another reason is the state's regulatory environment, which some insurers find challenging to navigate. Additionally, there is a high concentration of property insurance risk in certain areas, which can lead to significant losses for insurers if a catastrophic event occurs.
Furthermore, some insurance companies may have engaged in aggressive pricing or underwriting practices, which can result in unsustainable losses if they are unable to adequately cover their claims.
Overall, the insurance market in Florida is complex and dynamic, and several factors can influence the success or failure of insurance companies operating in the state.
Florida has experienced several natural disasters, including hurricanes, flooding, and sinkholes. As a result, property insurance companies have become more cautious about insuring properties in Florida, particularly those located in areas that are considered high-risk. This has led to an increase in property insurance premiums for condo associations, which are struggling to keep up with the rising costs.
In addition, the state of Florida has implemented several new laws and regulations in recent years that require condo associations to increase their reserves and improve their infrastructure, which can also lead to higher insurance premiums. For example, Florida now requires condo associations to conduct regular building inspections and to set aside a certain amount of funds for future repairs and maintenance.
The Florida property insurance crisis has created a difficult situation for many condo associations, which are facing significant financial strain as a result of the rising insurance costs. Some condo associations have had to increase their assessments or reduce their amenities in order to cover the cost of insurance premiums, while others are struggling to find insurance coverage at all.
The state of Florida has reportedly tried to address the property insurance crisis by implementing new regulations and policies aimed at increasing the availability of insurance coverage and reducing costs. However, it is likely that condo associations in Florida will continue to face significant challenges related to property insurance.
Some Florida condo buyers wish they had read the most recent insurance appraisal report and understood the qualifications of the individual or company that produced the condo insurance appraisal report before making an offer to buy a condo. Also, some Florida condo buyers wish they had noted the date of the most recent appraisal and whether replacement costs may have increased since the date of the most recent appraisal.
Prospective Florida condo buyers should, if they don't understand condo association insurance appraisals, engage licensed and reputable attorneys and advisors to guide their buying decision.