In Florida, a significant legislative effort is underway to address the soaring costs of windstorm insurance for condominium owners. A pair of bills recently filed at the Florida State Capitol propose a novel approach to this issue, focusing on the way roofs of condo buildings are insured.
The Rising Insurance Crisis
Condo owners especially in Florida have been fighting with escalating insurance premiums. Gerald Slan, a resident of a condominium on Singer Island, voices a common concern among condo owners about the high premiums and the financial strain they impose. A study by Lending Tree highlights that Floridians pay the highest disaster insurance premiums in the nation, approximately 66% higher than the national average.
The Proposed Solution
The legislative solution involves a pilot program that would require the state-owned insurer, Citizens Property Insurance Corporation, to cover condo building roofs at their actual cash value, rather than at full replacement cost. This approach, focusing on the depreciated value of the roof, could potentially lower insurance premiums for condo owners.
Robert Norberg, an insurance agent with Arden Insurance in Lantana, explains that this change would allow condo owners to opt for a lower premium. Currently, the law mandates replacement costs coverage, which significantly drives up insurance premiums. By allowing for actual cash value (ACV) coverage, insurance carriers could offer lower premiums, which would, in turn, reduce the dues and fees for condo associations.
To be eligible for this program, condo associations must secure a majority vote from their members and commit to biennial roof inspections. The program is specifically designed for buildings insured by Citizens Property Insurance.
Potential Impact and Concerns
If the proposed bills got passed it will bring much-needed relief to condo owners facing financial burdens due to high insurance costs. However, insurance expert Mark Friedlander cautions that opting for actual cash value coverage means not receiving the full value back for roof replacements. The age and condition of the roof could result in significantly lower payouts than the actual cost of replacement following a windstorm.
Legislative Process and Timeline
The bill, filed by Senator Ana Maria Rodriguez of Miami, is currently under consideration by the state legislature. If approved and signed by the governor, it would become law for five years, starting in July 2024.
Conclusion: Proposed Bills Aim to Reduce Condo Insurance Costs for Wind Coverage
These proposed bills represent a critical step towards addressing the insurance affordability crisis for condo owners in Florida. By allowing for actual cash value coverage of condo roofs, the state aims to provide a more sustainable and financially viable option for windstorm insurance. As the legislative process unfolds, condo owners and associations watch closely, hopeful for a resolution that balances affordability with adequate coverage.