Florida Condo Insurance Association Requirements

Understanding Condominium Insurance in Florida

Condominium insurance, often called condo insurance, is a unique form of property coverage designed to meet the needs of condominium unit owners and associations. Unlike traditional homeowners’ insurance covers the entire building and lot, condo insurance must account for the divided responsibilities between the unit owner and the condo association. It’s like owning part of a house and renting the rest—you need to know precisely which parts you’re responsible for protecting.

Condo insurance protects a unit owner’s personal property, interior walls, floors, ceilings, and liability exposures. This policy is commonly called an HO-6 policy. It’s crucial because while the condominium association carries a master insurance policy covering shared areas, that policy often doesn’t extend into individual units. So, if your kitchen floods due to a broken pipe and the association’s insurance only covers the drywall, you’re on the hook for cabinets, appliances, and flooring unless you have personal coverage.

In Florida, this setup becomes even more complex due to the state’s high hurricane risk and recent legal reforms that impact how insurance policies are structured and enforced. Understanding what you need as a unit owner and what your association is legally obligated to maintain is vital for staying protected.

Why Condo Insurance is Unique in Florida

Florida presents some of the most challenging insurance landscapes in the country, especially for condominiums. Due to its coastal geography and exposure to hurricanes, Florida condo insurance policies often come with high premiums, specific exclusions, and strict underwriting standards. Insurers are increasingly scrutinizing older buildings, requiring upgrades or inspections before offering or renewing policies.

What makes Florida especially unique is its reliance on the Florida Condominium Act (Statute 718), which dictates who insures what. This law clarifies the separation between what associations must insure (like the roof, exterior, and shared areas) versus what individual unit owners must cover (interior fixtures, flooring, and personal property).

The Role of the Condominium Association

Master Insurance Policy Explained

A condo association’s master insurance policy is the backbone of a condominium’s financial protection strategy. This policy typically covers all common elements of the condo property—think of things like roofs, elevators, exterior walls, lobbies, stairwells, hallways, and shared amenities such as gyms and pools. It’s often a large, expensive policy because it has to safeguard the entire complex.

In Florida, the master policy usually falls into one of two categories: “bare walls-in” or “all-in.” A bare walls-in policy covers only the structure and shared areas, excluding everything inside the individual units, except the drywall. An all-in policy (also called “single entity”) goes a step further by including some interior items like fixtures and built-in appliances, but it still excludes personal property and anything installed after purchase.

This policy is paid for using funds collected from unit owners through association dues. The cost of the policy is affected by factors such as the age of the building, past claims history, geographic location (especially proximity to the coast), and whether the association performs regular maintenance and safety inspections.

The importance of a well-managed master policy can’t be overstated. When disaster strikes, whether a fire or a hurricane, this policy determines what gets repaired and who foots the bill. It also directly impacts how quickly recovery can begin and how much unit owners may need to pay out of pocket to fix damage not covered under the master plan.

Key Insurance Coverage Requirements for Condo Associations

A. Property Insurance

The association must maintain property insurance for:

• The condominium building’s structural components

• Common elements such as roofs, elevators, lobbies, stairwells, and exterior walls

• Fixtures in the units, including drywall, cabinetry, plumbing, and electrical systems

Not Covered: Improvements or additions installed by unit owners, personal property within the unit, and floor, wall, or ceiling coverings.

B. Hazard and Windstorm Coverage

Due to Florida’s hurricane risk, associations must maintain hazard and windstorm coverage. This is particularly important for coastal condominiums. Insurers may exclude windstorm damage only if the association is ineligible under Citizens Property Insurance Corporation guidelines or if the exclusion is voted on by a majority of the membership.

C. Flood Insurance

Flood insurance is not required under Florida Statute but may be necessary:

• If the condominium is in a Special Flood Hazard Area (SFHA)

• As a condition for federal financing or FEMA flood assistance

Associations are encouraged to maintain flood insurance under the National Flood Insurance Program (NFIP) or a private carrier.

D. Liability Insurance

Associations must carry liability insurance to protect against bodily injury or property damage claims occurring in common areas. This includes slip and falls, pool injuries, and maintenance-related incidents.

The statute leaves no wiggle room for associations to skimp on these requirements. Doing so exposes residents to risk and invites legal action for non-compliance. That’s why many Florida condo associations hire expert legal advisors to help them comply with the law.

Annual Insurance Appraisals Are Required

Florida law requires condo associations to obtain an independent insurance appraisal every 36 months to ensure adequate coverage. Failing to do so can leave the association underinsured and exposed during a major loss event.

Unit Owner vs. Condo Association Insurance Responsibilities

What the Association Covers:

Typically, the association covers the structure, shared areas, and original building components (drywall, framing, electrical, plumbing).

The association is typically required to insure:

• Roofs
• Exterior walls
• Drywall (not including paint or finishes)
• Elevators
• Plumbing and electrical systems in common walls

The “walls-out” model means the association covers the unfinished drywall, while unit owners are expected to carry HO-6 policies for their interiors.

HO-6 Insurance Requirements for Unit Owners

While not a direct association requirement, associations must inform unit owners that they need to purchase their insurance. Unit owners are responsible for:

• Coverage for personal property
• Internal unit components not covered by the association policy
• Liability coverage for incidents within their unit
• Loss assessment coverage
• Additional living expenses

Who Is Responsible for What?

• Associations cover the physical structure and common areas.
• Unit owners cover personal property, flooring, cabinetry, appliances, and sometimes drywall finishes.

Clear bylaws and professional legal advice help avoid overlapping or missing coverage.

Who Pays the Deductible After a Loss?

Under Florida law, when damage originates from a covered peril (like windstorm or fire), the association is responsible for the deductible unless the damage was caused by a unit owner’s negligence or intentional misconduct.

Unit owners may also be liable for damage to personal property and improvements inside their unit. They must carry HO-6 condo insurance to cover the following:

• Personal belongings
• Loss assessment
• Interior buildouts

Recent Florida Condo Insurance Legislative Changes

The Florida Legislature regularly updates requirements affecting condominium insurance. Recent changes include:

• SB 4-D (2022): Enhanced structural inspection and reserve requirements affecting insurance eligibility
• HB 7065 (2023): Updated coverage requirements reflecting lessons from the Surfside collapse