In Florida, condo associations must have casualty insurance to cover property damage caused by “acts of God” such as hurricanes and floods. While master policies often vary by association, they typically cover everything outside the walls of each condo unit, including the building itself and guest injuries in common areas.
Condo Association Master Insurance Policy
A cornerstone of condo association insurance is the master insurance policy. This policy typically covers the condominium building’s structure, common areas, and shared amenities. However, the coverage specifics can vary widely depending on the type of master policy in place. There are typically two types of master policies:
Bare Walls-In Policy: This policy typically covers the building’s structure only, leaving individual unit owners responsible for insuring their unit’s interior fixtures, appliances, and personal belongings.
All-In Policy: Also known as a single-entity policy, this comprehensive policy extends coverage to the building’s structure and fixtures within individual units up to a certain standard. However, unit owners may need additional coverage to protect their personal belongings and upgrades beyond the master policy’s limits.
Florida Statutory Requirements
Florida law, specifically Chapter 718 of the Florida Statutes, outlines insurance requirements for condominium associations. Some key provisions include:
Minimum Coverage Requirements: Condo associations must carry insurance coverage for the condominium property, including property and casualty insurance covering all portions of the condominium property as originally installed or replaced with like-kind and quality materials per the original plans and specifications.
Hurricane Deductibles: Florida law mandates that condo associations disclose the hurricane deductible amount in their insurance policies. This helps unit owners understand their potential financial liability in hurricane-related damage.
Notice Requirements: Condo associations must notify unit owners of any material alterations or additions to the master policy. This ensures transparency and allows unit owners to assess their insurance needs accordingly.
Florida law doesn’t require individual unit owners to buy condo insurance. However, if you have a mortgage, your lender may require you to have a certain amount of condo insurance as a condition of your loan. This coverage helps protect the lender’s financial interest in your property. Even if you don’t have a mortgage, your condo association may have rules about coverage for individual unit owners.
What is Condo Insurance?
Condo insurance, or HO-6 insurance, is a specialized insurance policy designed to protect condominium owners from financial loss due to various perils. Unlike traditional homeowners insurance, which typically covers both the structure and the land, condo insurance focuses primarily on the interior structure of the unit and personal belongings. Since condo owners share common areas and building structures with other residents, the insurance coverage is tailored to address these unique circumstances.
Condo Coverage Essentials in Florida:
In Florida, condo insurance policies generally include the following essential coverages:
Dwelling Coverage: This component protects the interior structure of your condo unit, including walls, ceilings, floors, and fixtures, from covered perils such as fire, vandalism, and water damage. In the event of damage, it typically covers repairs or reconstruction of your unit.
Personal Property Coverage: Personal property coverage safeguards your belongings within the condo, such as furniture, electronics, clothing, and appliances. If your possessions are damaged or stolen due to covered events like theft or hurricanes, this coverage helps reimburse you for the cost of repair or replacement.
Liability Coverage: Liability coverage is crucial for protecting you financially in case someone is injured while visiting your condo unit. It helps cover legal expenses, medical bills, and damages if you’re found responsible for causing bodily injury or property damage to others.
Additional Living Expenses (ALE): If your condo becomes uninhabitable due to a covered loss, ALE coverage can help pay for temporary living expenses, such as hotel bills or meals, while your unit is being repaired.
Additional Coverages: Depending on the insurance provider and policy specifics, additional coverages may be available to enhance protection. These may include coverage for improvements and betterments made to your unit, loss assessment coverage for shared building repairs or lawsuits, and umbrella liability coverage for extended liability protection.
When purchasing condo insurance in Florida, it’s essential to consider several factors to ensure adequate coverage:
Building Master Policy: Condo associations typically carry a master insurance policy that covers common areas, building exteriors, and shared amenities. Understanding the association’s master policy is crucial for determining the extent of coverage needed for your unit.
Hurricane and Flood Insurance: Given Florida’s susceptibility to hurricanes and floods, assessing whether your condo insurance policy includes adequate coverage for these perils is essential. In some cases, additional insurance may be necessary to fill gaps in protection.
Personalization and Endorsements: Work with your insurance agent to tailor your condo insurance policy to your needs and preferences. To ensure comprehensive coverage, consider adding endorsements or riders for valuable items, such as jewelry or collectibles.
What Is Not Covered by Condo Insurance?
While condo insurance offers comprehensive coverage, there are certain events and items typically not covered:
Building Structure: The exterior of the building, the roof, and common areas are usually covered by the condo association’s master policy, not your condo insurance policy.
Flood Damage: Condo insurance policies typically do not cover damage caused by floods. You’ll need a separate flood insurance policy for this.
Earthquake Damage: Standard condo insurance policies usually do not cover earthquake damage. If you live in an area prone to earthquakes, you may need to purchase additional coverage.
Wear and Tear: Condo insurance is designed to cover sudden and accidental damage, not damage caused by normal wear and tear.
Florida-Specific Considerations
Due to Florida’s geography and climate, condo insurance policies may have some unique considerations. For example, hurricane insurance may be necessary, as Florida is prone to hurricanes. Reviewing your policy carefully and considering additional coverage options based on your location and condo association’s requirements is essential.
More Resources Related to Condo & HOA Insurance Claims:
-
Condo & HOA Hurricane Claim Guidebook
-
Why HOA & Condo Associations Should Hire an Insurance Claim Lawyer
-
Settlement for Florida Condo with Hurricane Damage
-
Settlement for Condo Building Owner