Condo association insurance costs doubled since 2022, new data shows
Property insurance costs in
The average cost of a commercial condo association policy — the kind that covers common properties like roofs, structures, and irrigation systems — jumped 6.6% in the second quarter, and over the past two years has more than doubled, increasing by 103% from
Smaller condominiums are paying less than the average and larger ones are paying more. But in each case, the increases are added to the monthly assessments paid by condo unit owners who are also facing higher assessments from inflation, as well as state-mandated requirements to undergo structural inspections and to fund reserves to make repairs.
He said the association’s insurer gave no reason. “Just said everyone is getting an increase,” he said.
Still, she said, older condominiums built before building codes were strengthened in the wake of Hurricane Andrew continued to see insurance costs rise while some associations that oversee newer concrete buildings with impact windows got a break.
One of her associations, in a building from the 1980s with a 13-year-old roof, saw an increase of 15% to 20%, while another association with a 2005-built concrete structure, impact windows and a two-year-old roof is paying a lower premium.
“It went down 4%,” she said. “Not an astronomical amount, but it’s going in the right direction.”
Dorigo concurred: “Newer associations that we manage have seen either their property insurance staying the same or going down slightly, so we’re seeing a little bit of a relief.”
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Figures in this report come from the
The averages are derived by dividing the number of policies into the total premiums paid. Each insurance company regulated by the state is required to submit its totals, plus other information, every quarter.
Average costs of insurance for 13,841 condo associations in
Increases in homeowner insurance costs slowing
The same reports show that homeowners are still seeing their insurance costs rise, even as state officials tout an improving insurance market.
The average cost of insuring an owner-occupied single-family home increased by 1.3% in the second quarter, the same rate as during the first quarter.
The average cost to insure a condo unit — which owners must pay in addition to association insurance if they want to cover what's inside their walls — also increased by 1.3%. That was the lowest rate of increase since the office began releasing the reports in 2022.
The average annual premium to insure an owner-occupied single family home in the state increased between the first and second quarters from
Insurance costs for owner-occupied houses and condo units in
"Most states are seeing double-digit increases," he said.
In
Friedlander added that legislative reforms enacted in 2022 and 2023 have resulted in fewer "frivolous lawsuits filed by billboard attorneys." As a result, 12 Florida residential insurers have sought rate decreases and 24 requested approval of average rate decreases and 24 filed for no rate change this year, he said.
"These cost improvements will be passed down to policyholders over the next year,” he said.
Cost increases for homes and condo units since
Since
The two 1.3% average increases of costs to insure owner-occupied homes over the first two quarters of this year followed much higher quarterly cost hikes since
Costs stemming from rate increases that occurred prior to 2022 were not available for this analysis because insurers previously delivered market share reports to the state labeled as '"trade secret."
Inspection and reserve requirements could further drive up costs
Suarez-Resnick blamed higher reinsurance costs for the surges of both homeowner and condo association insurance costs. Reinsurance is insurance that insurers in
Reinsurance costs rose sharply while the state's insurance market coped with rising claims from hurricanes Irma, Michael and Ian while absorbing increased costs of litigation prior to the reforms of 2022 and 2023.
Another cost driver was the 2021 collapse of the Champlain Towers South in
Average costs of more than 2,400 dwelling/fire policies sold by
In a statement to the
"Additionally, after the
But since the beginning of 2024, reinsurance costs have decreased, according to Suarez-Resnick.
Condo owners are waiting for their costs to come down, particularly as they brace for additional increases in monthly assessments thanks to heightened inspection and reserve requirements enacted after the tower collapse.
Those laws require associations to complete Structural Integrity Reserve Studies of common elements no later than
The studies must identify remaining useful life of the structural elements and recommend annual reserves that associations must raise to repair or replace them.
Beginning
Early last week, Gov.
But some associations have already completed required inspections and levied special assessments to raise reserves necessary to fund repairs identified by the inspections.
Some associations have began budgeting for the reserve requirement by raising assessments 15% to 20% in recent years and might require another 15% to 20% increase when their structural inspections are finalized, Dorigo said.
So that typical monthly assessment that was increased to
Some associations have made decisions to reduce their insurance burdens, including raising deductibles above 5% or even forgoing hurricane coverage, said
When that happens, the associations no longer comply with minimum insurance requirements set by federal mortgage guarantors
Associations with older roofs might not be able to afford full replacement cost coverage and must settle for actual cash value coverage and that also can be something that lenders don't like, he said.
That leaves unit owners who want to sell to require all-cash purchases, or to ask Garcia and his team to find alternative loan sources, he said. "They're more expensive loans," Garcia said. "Some of the options get eliminated, and they're usually having to come up with a 20% to 25% down payment."
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