Condo Insurance 101: What Florida Law Requires & What You Should Know

We recently wrote an article discussing the need for individual homeowners’ insurance even if you have paid off your mortgage. The prior article was specifically focused on single family homes. This article discusses the specific, detailed statutory requirement for condominium association required insurance, leaving for owners of condominium units the option to insure anything in the individual unit. In many ways, the obligations for insuring condominium units are very clear, as the Condominium Act, Chapter 718, outlines the insurance requirements of the condominium association thereby leaving property outside of the association requirements for the individual condo owner to insure.

Specifically, Florida Statute 718.111(11) provides that a condominium association must obtain and maintain “[a]dequate property insurance, regardless of any requirement in the declaration of condominium for coverage by the association for full insurable value, replacement cost, or similar coverage[…]”  The computation of the amount of coverage “[…]must be based on the replacement cost of the property to be insured as determined by an independent insurance appraisal or update of a prior appraisal. The replacement cost must be determined at least once every 36 months.” While the Board of Directors has flexibility in determining items like premiums and deductibles, the statute goes on to state that the coverage must include:

1. All portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications. 

2. All alterations or additions made to the condominium property or association property pursuant to s. 718.113(2).

Interestingly, the statute further goes on to list the items of property that the association’s insurance coverage MAY NOT include: 

The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner.

As a result, each unit owner is responsible (responsibility does not equate to an obligation) for insuring all of the items not covered by the Association’s policy. This is true even if the maintenance obligations in the Declaration of Condominium have differing standards. To be clear, maintenance obligations in the Declaration do not always align with the insurance obligations. It is important to check your governing documents to know the difference. The Declaration of Condominium may also be the source of any requirement for an owner to carry his own individual insurance.  Accordingly, it is important to review your documents, with competent counsel as necessary, to understand what, if anything, you are required to insure.  Further, it is recommended that all individual condo owners obtain some insurance to cover their personal property and any areas within the unit.