As you know, rising insurance premiums are impacting all property owners in Florida, including condo associations. Increase after increase… after increase… can make it extremely challenging for HOAs to balance their budgets. Regularly reviewing your insurance policy is an important step you can take to ensure you’re maintaining the coverage levels you need at a cost that works for your association.
How Frequently Should the Condo Board Review Insurance Coverage?
At a minimum, condo associations should review their insurance coverage once a year (roughly six months before their renewal date is ideal). That said, you should always feel free to shop around for new insurance. A skilled insurance law attorney can help you understand what coverage your association does and doesn’t need to best protect itself.
Florida condo associations are required to hold both general liability property and regular liability insurance. General liability property insurance covers the buildings themselves. This is the most important insurance any HOA will carry, and the one that will incur the most expense. To learn more about the types of insurance policies your HOA should have, be sure to read this post.
How to Prepare for Rising Insurance Premiums For Florida Associations
As part of your insurance review process, you’ll need to determine if your current insurance carrier will continue to renew policies. Not all in Florida are, and they are only required to give you a 45-day notice of their intent to not renew a policy. If your current insurance company will renew, ask for an estimate of how much the premiums will go up. Once you know the type of increase you’re working with, you can review your budget and CC&Rs to figure out your next steps.
Rising insurance premiums mean most associations will have no choice but to amend their budgets – a special assessment would be nothing more than a band-aid since this is not a temporary cost increase. It’s worth asking your insurance company if they offer credits for safety implementations.
Things like 24-hour security, hurricane shutters, water leak detection, and fire alarm systems all reduce the risk of loss, which means having these safeguards in place may save you money on your policy. Another good idea is to shop for new insurance more regularly. This can be a daunting exercise, but we are here to help. If you have questions about insurance law in Florida or need to retain an attorney for your association, contact our team at Dania Fernandez and Associates, P.A. today.
We offer legal assistance in all matters of condominium association law, homeowners and community association law, real estate litigations and transactions, residential and commercial closings, and insurance law.
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