Insurance Changes For Condominiums

Una traducción española está disponible en Web site: www.TAJWatchSpanish.blogspot.com

The following article was provided to the BOD President by the Association's insurance agent (George Smith). He suggests that we pay special attention to the items that will be effective at the first of the year (in bold, below). Thanks to W2ndi H1ll for sharing the information with the blog.

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Condominium Insurance Changes for 2008, by David Thompson

During the 2008 legislative session House Bill 601 was passed. This bill makes changes to parts of Chapter 718 of Florida Statutes dealing with condominium insurance issues. FAIA is in the process of preparing a detailed analysis of this bill and once that is completed this article will be updated. For the time being, the revised statutes pertaining specifically to insurance are below. Some of the language is troublesome to say the least, while other parts of the statutes are unclear.

As a very brief summary of the changes:

• Association insurance must be based on the replacement cost of the property as determined by an "independent insurance appraisal" done at least every 36 months.
• Associations are still permitted to self-insure, as long as Florida Statutes are followed.
• The "pooling" arrangement authorized in the 2007 legislative session is permitted, but after onerous testing by the Office of Insurance Regulation. It is FAIA's view that few, if any, such arrangements will meet the criteria specified in the statute. The statutory change applies to new pooling arrangements as well as existing arrangements when they renew.
• The board may determine the deductible on the property, subject to revised language in the statute.
• Air conditioners are no longer on the list of excluded property under the master policy. The remaining items such as wall coverings, cabinets, appliances, and other items remains essentially unchanged. (Effective 1/1/09.)
• The statute states that the unit owner policy shall include "special assessment" coverage of no less than $2,000. (Whether carriers will provide this remains to be seen.) (Effective 1/1/09.)
• Improvements and alterations made by unit owners that benefit fewer than all residents (such as an enclosed balcony) shall be insured by the unit owner. (Effective 1/1/09.)
• The association shall require the unit owners to produce evidence of insurance. (Effective 1/1/09.)
• The unit owner policy shall name the association as an additional named insured. (Whether carriers will provide this remains to be seen.) (Effective 1/1/09.)
• Reconstruction work after a loss shall be undertaken by the association, except where noted in the statute.
• All hazard insurance deductibles, uninsured losses, and other damages in excess of hazard insurance coverage under the hazard insurance policies maintained by the association are a common expense of the condominium. The bylaws can be amended to alter the way such losses are allocated.

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Click link to see the full revised statutes.