Cost of Condo Insurance Soars as Legislators Stay Silent
Florida legislators gathered next for a special session to solve the state’s property insurance issue. However, the issue of condominium insurance has received little attention.
Insurance Premiums Are Increasing
The 98 deaths from the Champlain Towers South condo collapse in Surfside resulted in several issues. Since then, the cost of condo building insurance has increased from 30% to 100%. In the past year, insurance rates for condos have gone up, and some of them have gone up by more than 100%.
What About Sales?
Because of the nature of the real estate market, condo unit sales remain high. Even though a lot of people buy homes with cash, new homeowners are often met with a harsh reality.
Consequently, condo owners must buy insurance via the more costly and less regulated surplus lines market. They can also use the state insurer, Citizens Property Insurance. Some properties are beyond the reach of even the most affluent families. There are coverage limitations of $700,00 nationwide and $1,000,000 in Monroe and Miami-Dade counties.
The Impact of Rising Insurance Prices on Condominiums
The condominiums insurance market has the same issues as the homeowner insurance industry. In the last ninety days, three Florida homeowners’ insurance firms have declared bankruptcy. A fourth has announced the cancellation of almost 68,000 policies. The House released a bulleted list of the bills that will be debated on Friday night. None of the items applied to condominiums.
There has been a reduction in the number of individual condominium insurance policies for structures older than 40 years. The insurance industry saw a 27% spike in new coverage for older buildings in Florida in March. There was a 37% increase in Miami-Dade and Broward counties alone.
Property insurance is becoming vital to unit owners in condo buildings established before 1982. In March, people all over the state said that the number of new condo sales went up by 35%. However, insurance for condos only went up by 12% in Miami-Dade and Broward counties.
Mark Clarkson suggests the condo policy insurance market was in decline before the collapse of the Champlain Towers. This casts doubt on the structural soundness of hundreds of elderly condominium buildings in Florida. The problem has only become worse since the Surfside disaster.
Some insurers have ceased issuing master policies for condominium complexes. Others have decided not to renew them. Those that have remained have implemented harsher underwriting requirements. Condominium organizations must also show that all buildings have been properly inspected on-site. All board members must sign affidavits saying that there are no outstanding maintenance issues. Check out our South Florida insurance services.
Legislators Could Not Reach an Agreement
Legislators discussed statewide re-inspection standards for older buildings. They also discussed financial reserve requirements during a March session. The Senate and the House of Representatives could not agree on how to move forward with the plans. The Senate declined to force condo associations to keep reserves for structural repairs.
One of the most essential benefits of insurance is that you are never left on your own. Condominium insurance protects you if the property becomes uninhabitable, requiring you to relocate. Out-of-pocket expenditures such as hotel stays will be reimbursed by the insurance company. ZK & Associates can provide you with the most comprehensive insurance coverage for condos in South Florida. Our crew is made up of experts in the industry, and we will be with you from start to end. Contact us today and we’ll guide you in obtaining the best coverage for your unit.
