Condo Insurance Laws to Change July 1
The Governor has approved legislation passed in the recent session addressing several aspects of Florida’s condominium insurance laws. Among the changes, the new law makes changes to insurance requirements that apply to condominium associations and unit owners’ policies. Some of these changes are similar to reforms that passed last year in a bill that ultimately was vetoed by the Governor for other reasons. Noteworthy changes in the new law, now known as Chapter Law 2010-174, taking effect July 1 include:
Loss Assessment Coverage:
The new law creates a new section 627.714 governing loss assessment coverage under unit owners’ policies. The statute continues existing law by requiring unit owners’ policies to provide at least $2000 in property loss assessment coverage. However, the law contains new provisions clarifying the amount of coverage provided and the application of deductibles.
Adequate “Property” Insurance:
Current law requires condominium associations to obtain adequate “hazard” insurance, which has raised questions of interpretation. This reference is being clarified to require associations to obtain adequate “property” insurance. A reference to determining the “full insurable value” of condominium property every three years is being updated to require the “replacement cost” to be determined every three years.
Unit Owners’ Coverage:
In recent years, the legislature has attempted to better define the relative insurance responsibilities of associations and unit owners. Under existing law, the association policy excludes personal property within the unit or limited common areas, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments including curtains, drapes, blinds, hardware and similar window treatment components. The new law clarifies these items are the insurance responsibility of the unit owner to the extent they are within the boundaries of the unit and serve only the unit.
The new law deletes a current law that specifies improvements or additions to condominium property that benefit fewer than all of the unit owners are the insurance responsibility of the unit owners having use of the property or may be insured by the association at the expense of the unit owners having use of the property.
The legislature also has deleted a provision of current law requiring unit owners to provide evidence of insurance upon the request of the association and allowing the association to purchase insurance on behalf of unit owners without insurance at the unit owners’ expense.
The new law also eliminates an existing provision specifying that associations must be listed as additional named insureds and loss payees under unit owners’ policies.