Information on Florida Condo Insurance
Condo insurance differs from standard homeowner's insurance in several ways, but it is fairly standard throughout the U.S., even across state lines. Floridian condo owners must buy condo insurance by law, but the product is largely the same as condo insurance in any other state. Florida's laws are what make Florida condo insurance unique, not the product itself.
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Homeowners' Association
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Condominium complexes everywhere have homeowners' associations that own and manage the building on behalf of their residents. Each association also insures its building and any common structures such as swimming pools and walkways. However, the association does not insure the individual units inside the building. This is each unit owner's responsibility. The association's master insurance policy explicitly states how much of the building it insures. Many policies only insure up to the studs, leaving all cabinetry, walls and flooring to the unit owners to insure. Others may include some or all of the permanent fixtures inside the units.
Condo Unit Insurance
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Each condo unit owner must be aware of what the master insurance policy covers so he can tailor his unit insurance to match. For example, if the master policy only insures up to the studs, the unit owner must include some real property coverage on the unit policy to protect the cabinets, shelves, ceiling fans and all other permanent fixtures inside the home. In the absence of this coverage, those items would be unprotected in the event of a loss, and the owner would have to replace them with his own money.
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Florida Law
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Florida law requires all condo unit owners to carry condo insurance, as of 2011. Previous laws once required homeowners' associations to buy insurance for delinquent owners and charge them the cost of the coverage, but the law has been amended so that, as of March 2011, the associations can no longer do this. The condo insurance requirement recognizes that hurricanes and other weather-related losses are common in Florida, and if a unit sustains damage that is not covered by insurance, the value of the whole building and the other units can suffer as a result.
Required Coverage
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A Florida condo insurance law effective Jan. 1, 2009, states that all Florida condo insurance must include a minimum of $2,000 loss assessment coverage. Sometimes, homeowners' associations must pay for repairs or other damages, and they often assess a proportional amount of the cost to each unit owner. The loss assessment coverage allows the insurance company to pay this assessment on the owner's behalf. All policies must now include the minimum $2,000, but you can purchase higher coverage for additional premiums if you choose.
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References
- Travelers Insurance of Florida: Condominium Owners Insurance 101
- Sun Sentinel; Florida Law Still Requires Condo Unit Insurance, But Association No Longer Can Buy Policies on Your Behalf; Daniel Vasquez; June 2010
- Allstate Insurance: Guide to Condo Insurance
- US Condo Exchange, LLC; New Condo Insurance Law in Florida effective Jan 1, 2009; Andy Cohn; December 19, 2008
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