Legislative News

LEGISLATIVE INSURANCE NEWS
FLORIDA'S CONDOMINIUM INSURANCE NEWS UPDATE

Florida's legislature has just amended various provisions of the state law relating to condominiums and homeowners associations. Some of the (Condominium Act) law changes are as follows: EFFECTIVE July 1, 2008.

Insurance policies issued to unit owners after January 1, 2009, must contain a provision that their policy is excess coverage over the amount recoverable under any other policy and include special assessment coverage of at least $2,000. per occurrence.

The association must be named as an additional insured and loss payee on all casualty insurance policies issued in the condominium.

Unit owners are required to provide to the association evidence of hazard and liability insurance upon request (but not more than once per year) and if not provided, the association may purchase a policy of insurance on behalf of, and at the cost of, the unit owner. The association must be named as an additional insured and loss payee on all casualty policies issued to unit owners.

An association is required to obtain and maintain adequate hazard insurance that is based upon the replacement cost of insured property, with the full insurable value to be determined by an independent insurance appraisal made at least once every 36 months.

A hazard insurance policy issued to an association must provide primary coverage for all condominium property as originally installed or replacements of like kind and quality in accordance with plans and specifications , and all alterations or additions made to condominium or association property, but excluding all personal property within a unit or limited common elements; floor, wall and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and counter tops and window treatments. Every hazard insurance policy renewed after January 1, 2009 must provide such coverage.

Those parts of the condominium that benefit fewer than all of the unit owners are to insured by the unit owners who have the use or, or may be insured by the association at the cost of those unit owners who have the use thereof.

The legislation provides for an allocation of repair or reconstruction expenses between the association and the unit owners, with unit owners responsible for the cost of reconstruction of any portions of the condominium property for which the unit owner is required to carry insurance, and with unit owners responsible for costs of repair or replacement of condominium property not paid by association insurance proceeds if damage is caused by negligence, intentional acts or failure to comply with the declaration or rules by the unit owner or his or her family members, unit occupants, tenants, guests or invitees. The association, upon majority vote of the total voting interests, may opt out of the statutory allocation of expenses by approval of a majority interests, may opt out of the statutory allocation of expenses by approval of a majority of all voting interests in the condominium and rely upon the allocation of repair or reconstruction expenses as provided by the declaration of condominium. The association is not obligated to pay for reconstruction or repair expenses due to damage to improvements installed by unit owners or the developer if the improvement benefits only the unit for which it was installed.

A multi-condominium may elect, by majority vote of the collective members of the condominiums operated by the association, to operate a single condominium with respect to insurance matters.

An association may amend the declaration of condominium without regard to any requirement for approval of mortgagees to conform the declaration to the insurance coverage requirements of the legislation.