As cost of condo insurance soars, legislators remain silent [Miami Herald]
Commercial residential insurance rates on condo buildings have seen rate hikes of 30% to 100%, exacerbated in part by the collapse of the Champlain Towers South condo in
As many as nine companies that offer condo insurance have left the market and of the estimated four companies that are still writing, they have increased premiums an average of 50%, and as much 100% in some markets, said
Condo unit sales are still active, however, as the red-hot real estate market has “condos still flying off the shelf,” he said. But while many buyers are offering cash payments for their purchases, new homeowners too often are faced with a grim reality, he said. “There is no capacity on the market — that dried up by March 1.”
The result is that condominium owners are being forced to turn to the more expensive and less-regulated surplus lines market or obtain insurance from
The condo insurance market reflects the same problems as the larger homeowners property insurance market. In the last 90 days, three
Late Friday, the House put out a list of bullet points describing some proposals that will be considered. None of the items mentioned condominium coverage.
Earlier in the week, Gov.
“It will be a significant package,’’ the governor said Monday. “And we’re not going to accept anything less than a very significant package for the people of Florida.”
Citizens sees spike in condo policies
For the last year, Citizens has seen the number of individual condominium insurance policies for buildings older than 40 years decline across the state. Then, in March, the company saw a 27% spike in new policies for older buildings in
In condominium buildings built before 1982, unit owners increasingly had to turn to Citizens to obtain property insurance, Citizens told the Herald/
“I haven’t seen it this bad in 30 years,’’ Clarkson said.
Condo associations are required by law to have master policies for building coverage, to cover structural damage from things like storms, wind and fire. Most condo associations also have bylaws stipulating other insurance requirements, such as flood insurance, general liability, directors and officers insurance (which protects people who make decisions for the board).
But for several years, there has not been much competition among insurance carriers to write master policies for the condo market at the same time banks were “making it increasingly difficult to get a loan” for a mortgage on a condo unit, Clarkson said.
Before Champlain Towers South collapsed on
Some companies have stopped writing master policies for condominium buildings, others are simply choosing not to renew, and the few that remain writing have imposed new underwriting policies. Condominium associations now must provide proof that the condo building has passed all inspections, conducted a detailed on-site inspection of all buildings, and all members of the board of directors have signed affidavits confirming there are no outstanding maintenance issues.
Legislators couldn’t reach agreement
During the regular legislative session that ended in March, lawmakers considered legislation that would impose statewide re-inspection requirements for aging buildings and address the financial reserve requirements needed to pay for them.
But the bills died when the
Many condo owners can’t agree on funding reserves for repairs. Legislature can’t, either
“Florida property insurance crisis is a man-made disaster, not a natural disaster,’’ said
Between 2020 and 2021, there were 2,267 commercial residential condo policies dropped by admitted carriers in
For homeowners seeking information on surplus line carriers, which are not regulated, OIR directs readers here.
At a briefing on Florida’s insurance market sponsored by AM Best, the credit rating agency, insurers warned that Florida’s property insurance climate is going to get worse before it gets better.
DeSantis isn’t offering specifics
Meanwhile, DeSantis has remained silent about what direction he would prefer lawmakers to go. He said this week that he was open to addressing other issues “if the Legislature comes to me and say they have an agreement on doing some of the other key things that people have talked about across a wide range of issues.” Efforts to get his communications staff to clarify whether he has taken a position on either the House or
He said he is one of the only legislators who lives in a condominium and has lived through the pain of finding affordable insurance. He said he bought his condo a couple of months ago and the the price tag on his property insurance was “horrific.”
“I’m underwhelmed that anything we do next week will result in immediate premium reductions,’’ he said.
He also said he fears that lawmakers are doing too little, too late.
“My biggest concern is that property appraisals have trailed the appreciation in the real estate market, and they’re going to catch up and you’re going to have a perfect storm,’’ he said. “Higher property taxes, higher insurance, insurance on mortgages and that’s all going to pop the balloon and cause recessionary pressures.”
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