For the past three years I have been under the impression that homeowner’s insurance for condo owners was required by the State of Florida and have told our condo owners so.
As I understood it, however, there was no enforcement mechanism in place to make owners buy this insurance.
Now, as I have understood it, by vote of the Florida legislature and signed into law by Governor Crist this year, an extra, special $2000 coverage has been required. This $2000 coverage goes to help meet the deductible (should it be applied) on an association’s overall insurance coverage---our association’s overall coverage, of course, being the one arranged for by UCO on essentially the exteriors of our buildings.
There was more that I understood, too. First, that the legislature had changed the law regarding the overall insurance on condos, so that if hurricane damage exceeded 2% of the total value of our buildings, we could collect for all the damage WITHOUT a deductible being applied; but that if the damage amounted to less than the 2% figure, the deductible WOULD be applied.
The latter situation was remedied by the $2000 legislation. As complicated as it might seem, the shortfall on the overall insurance coverage would be met by the combined $2000 coverages of all the condo owners on their homeowner’s insurance policies.
Secondly, I understood that there was an enforcement mechanism in place, so that if a condo owner did not purchase homeowner’s insurance (with the $2000 coverage), the condo association could buy it for him, bill him for the cost, and if payment were not forthcoming, put a lien on his property.
This seemed to open a whole can of worms (a “nightmare” was the way one of our board members described it). It seemed to promote an adversarial relationship between the board and owners who did not wish to have homeowner’s coverage.
It meant requiring every owner to submit a copy of the homeowner’s Declaration Page to the board every year. It meant raising the hackles of owners, possibly even leading to litigation, over the requirement that the association be "an additional named insured and loss payee" on the homeowner's policy. It meant having to bill owners for coverage purchased by the association for their units. It meant the board having to go through the hassle of having an attorney apply liens. And it meant, perhaps worst of all, the association’s having to pay out of pocket for noncompliant owners until, hopefully---but perhaps not until years later when many owners had moved on---the association collected on the liens. A little arithmetic showed that if even only 4 of our 26 owners were noncompliant, the association might have to come up with 4 x $400 = $1600 PER YEAR. Obviously, the thing to do was press for 100% compliance.---Could our board simply not apply the “enforcement mechanism”? No, I was told, this was inadvisable, because we would be failing in our fiduciary duty to make all owners pay equally for the relief to the overall insurance’s deductible.
Having thought I had learned all this and passed it on to our board, NOW I HEAR SOMETHING DIFFERENT. An owner told me he had contacted his former homeowner’s insurance company and was told the special $2000 coverage was mandatory only IF he had homeowner’s coverage, BUT THAT HOMEOWNER'S ITSELF WAS NOT MANDATORY. I called Tallahassee and spoke with someone in the Insurance Commissioner’s office. Yes, she told me, this owner was correct in what he told you: it is not mandatory for all condo owners to have homeowner’s insurance—UNLESS the condo board has voted to make it mandatory.---Is this true? Is it true that the board has this choice? If so, it is the first I have heard of it, and all I can say is that it has certainly not been emphasized. But I think (if true) it SHOULD be emphasized. My point is this: Associations should first be told what the facts are, clearly and unambiguously. If the law itself is ambiguous and perhaps open to interpretation, UCO should tell us THIS. Then, and only then, should associations be told what UCO ADVISES; and the two should never become mixed up.---What are the facts about this? Can anyone tell me authoritatively? And how can I get a copy of the pertinent legislative documents without their being “condensed” and/or added to with UCO remarks, no matter how well intended? Must I talk with an attorney to get straight on all this?
Lanny Howe
Sheffield N
Sunday, November 16, 2008
Is Condo Homeowner's Insurance Mandated by Tallahassee or Not?
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8 comments:
Check the new Florida law regarding condo (not homeowners) insurance requirements-condo owners are required to have the insurance policy and the $2000 loss addendum payable to their association. Don't know what your old insurance company was tellig you.
If you have the correct answer to Lanny's question, then answer it with your legal name or shut up.
Anonymous in this case will not do.
Anon 11:24, this is NOT the lawyers forum, although there are a lot of wannabes here.
It appears you got the correct information from the Insurance Commissioner's office. The law is ambibuous. The law is available at leg.state.fl.us/statutes
Perhaps you want to read 718.111 (11) and make up your own mind; and pursue what is good for your association.
As I was told not to long ago, I "would not depend on UCO."
Have you spoken to Dan Gladstone? I bekieve that you will get the correct information from him. He is ready to come and speak with any associations that invite him.
Here it is, Dan Gladstone, UCO, and lawyer wannabes not withstanding:
The Condominium Act requires a unit owner-controlled association to use its best efforts to obtain and maintain adequate insurance to protect the association, the association property, the common elements and the condominium property required to be insured by the act.
Effective Oct. 1, 2008, the law now mandates that when an association acquires hazard insurance, coverage must be based upon the replacement cost of the property being insured as determined by an independent insurance appraisal; which insurance value must be determined once every 36 months.
When determining the adequate amount of hazard insurance coverage the association may consider deductibles which take into consideration industry standards and prevailing practices for communities of similar size and age, available funds, and predetermined assessment authority.
The coverage afforded under the association's policy shall cover all portions of the condominium property as originally installed or replacement of like, kind and quality in accordance with the original plans and specifications. Excluded from coverage, which therefore must be included within the unit owner's HO6 policy, is all personal property within the unit or limited common elements, floor, wall and ceiling coverings, electrical fixtures, appliances, etc. (Please note, previously, unit ac units were also excluded from the association's policy; it is now included).
There are so many anonymouses in this thread. I don't know which one spoke improperly to some of the blogs and which one made sense. This is another reason they should have a number before their status. We don't know whether we are speaking to someone we disagree with or agree with.
You already have a number for each anonymous...it's the date and time they posted.
Duh!!!!!!
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