Will Insurance Rates Rise?

Lisa Magill recently wrote an article of interest about Condominium property insurance in Florida: Citizens' to Increase Condo Insurance Premiums by 20%

She writes:

"Citizens' Property Insurance is the state-run, not-for-profit insurer of 'last resort' in Florida, created in 1992 and operating pursuant to Section 627.351, Florida Statutes. It insures over 23,000 commercial residential properties in Florida and recently issued an Agent Technical Bulletin notifying the public of its intent to increase premiums for policies affording coverage to properties valued in excess of $10 million. Many policyholders will see rates increase by 20%. Insurance premiums are often the most significant line item in a community association budget. Communities already struggling with shortfalls and bad debt need to take the increases into account when preparing budgets for the upcoming year."

I don't know if this will have an impact on TAJ's insurance or our budget, but I thought I would bring this development to the attention of the finance committee as they go into the new year and the new proposed budget.

Is Home Owner's Insurance Mandated By Florida Law?

Have you heard about the new requirement passed by the state of Florida that requires Condo Associations to ensure that unit owners have homeowner's insurance? Click here to read an interesting discussion on the subject. The link leads to an online news-like article by attorney Jerome F. Skrandel in which he exchanges thoughts and opinions and Florida law citations with readers. It is educational and interesting reading.

Board of Directors Meeting

Wendy, Mark, Ben, Carol, and John were present along with a few unit owners. The Human Resources committee recommended that two candidates be interviewed by the board for their consideration in filling the position of Property Manager. The date of the subsquent meeting with the potential hires is to be determined by the committee chair.

The BOD meeting was quickly closed to the public for a meeting with the Association attorney, the Public Adjuster and their attorney that represent the interests of the Association in negotiations with our insurance company. There is work being done to ensure that we are taking steps to recover insurance money that is due to us, and that we are acting within the parameters of the law.

[haga clic aquí para la traducción al español]

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.

*************************************************************************************
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.

*************************************************************************************
Click link to see the full revised statutes.

Loss Assessment Insurance: Low Cost For Higher Coverage

[The article below is reprinted from the February 2007 edition of the official TAJ newsletter -- TAJ Community News, Volume 4 Issue 1]

The following explanations about loss assessment coverage were taken from sources on the internet, as cited.

Loss Assessment Coverage
Property insurance (ISO form CP 04 19) for a condominium unit owner, covering assessments charged by a condominium association for a loss to the property. The policy pays the amount of the assessment, if the loss is caused by an insured peril. (from Rupp's Insurance & Risk Management Glossary. © 2002, NILS Publishing. All rights reserved.) http://insurance.cch.com/RUPPS/loss-assessment-coverage.htm

Loss Assessment: Coverage D
This valuable coverage is uniquely designed for owners in condominiums/ associations. It recognizes the potential for owners to be assessed for certain kinds of loss. Here are examples of circumstances that might require the condominium/ association to assess all unit owners:

• Someone is seriously injured on common property (perhaps at a swimming pool) and the courts award a judgment that's higher than the amount of liability coverage provided by the condominium/association policy.
• Major damage occurs to commonly owned buildings and it is not fully covered by insurance.

In either case (and other similar cases), loss assessment coverage would pay your share (up to stated amount). You should review the need for this coverage with your agent and buy an appropriate amount of coverage. http://www.statefarm.com/insurance/condo_owners/condoinform_5.asp

It may be that, without even knowing it, owners have insurance coverage for the Special Assessment that they receive for the replacement of their roof due to Hurricane Wilma damage. Check your home-owner’s coverage to see if you have this type of coverage. See below for an example of what it actually looks like in an insurance policy.

You can see that in the policy shown below the coverage is limited to $1,000. All it took to raise the limit to $3,000 (this particular insurance company’s limit) was a five minute call to the insurance agent and a yearly premium increase of just $11.00.

Since Hurricane Wilma, we have all been faced with the difficult reality of the need for re-roofing. Hopefully LOSS ASSESSMENT coverage will reduce the suffering of unit owners caused by Special Assessments. Certainly we should all consider taking action to protect ourselves against future financial difficulties through the relatively inexpensive measure of acquiring an appropriate level of LOSS ASSESSMENT coverage through our home-owner’s insurance. Steve Frahm

Seguro del gravamen de pérdida: Bajo costo para una cobertura más alta

[El artículo abajo se reimprime de la edición del febrero de 2007 del boletín de noticias del funcionario TAJ -- Noticias de la comunidad de TAJ, edición 1 del volumen 4]

Las explicaciones siguientes sobre cobertura del gravamen de pérdida fueron tomadas de fuentes en el Internet, según lo citado.
Cobertura del gravamen de pérdida
Seguro de característica (la ISO forma CP 04 19) para un dueño de la unidad del condominio, cubriendo los gravámenes cargados por una asociación del condominio para una pérdida a la característica. La política paga la cantidad del gravamen, si la pérdida es causada por un peligro de los asegurados. (del & del seguro de Rupp; Glosario de la gestión de riesgos. © 2002, publicación de NILS. Todos los derechos reservados.) http://insurance.cch.com/RUPPS/loss-assessment-coverage.htm
Gravamen de pérdida: Cobertura D
Esta cobertura valiosa se diseña únicamente para los dueños en asociaciones de los condominios. Reconoce el potencial para que los dueños sean determinados para ciertas clases de pérdida. Aquí están los ejemplos de las circunstancias que pudieron requerir la asociación del condominio determinar a todos los dueños de la unidad:

• Dañan alguien seriamente en característica común (quizás en una piscina) y las cortes concede un juicio que sea más alto que la cantidad de cobertura de responsabilidad proporcionada por la política del condominio/de la asociación.
• El daño importante ocurre a los edificios comúnmente poseídos y no es cubierto completamente por el seguro.

En cualquier caso (y otros casos similares), la cobertura del gravamen de pérdida pagaría tu parte (hasta cantidad indicada). Debes repasar la necesidad de esta cobertura con tu agente y comprar una cantidad apropiada de cobertura. http://www.statefarm.com/insurance/condo_owners/condoinform_5.asp

Puede ser que, sin incluso saberlo, los dueños tengan cobertura de seguro para el gravamen especial que reciben para el reemplazo de su azotea debido al daño de Wilma del huracán. Comprobar la cobertura de tu dueño de una casa para ver si tienes este tipo de cobertura. Ver abajo para un ejemplo de lo que parece realmente adentro una póliza de seguro.

Puedes ver que en la política demostrada debajo de la cobertura está limitado a $1.000. Todo lo que tomó para levantar el límite a $3.000 (este límite particular de la compañía de seguros) era una llamada de cinco minutos al agente de seguro y a un aumento superior anual de apenas $11.00.

Desde el huracán Wilma, nos todos han hecho frente con la realidad difícil de la necesidad del re-material para techos. Esperanzadamente la cobertura del GRAVAMEN de PÉRDIDA reducirá el sufrimiento de los dueños de la unidad causados por gravámenes especiales. Debemos todos considerar ciertamente tomar medidas para protegerse contra las dificultades financieras futuras con la medida relativamente barata de adquirir un nivel apropiado de cobertura del GRAVAMEN de PÉRDIDA con nuestro seguro de dueño de una casa. Steve Frahm