google.com, pub-6007374308804254, DIRECT, f08c47fec0942fa0
More

    Florida Bill Barring Citizens Coverage for Noncompliant Condos Passes Committee


    A Florida House bill that would bar Citizens Property Insurance Corp. from writing condominium properties that haven’t complied with inspection deadlines passed its first hurdle this week. But the measure has been questioned by some as unnecessary and potentially detrimental to struggling condo associations.

    House Bill 913, introduced by state Rep. Vicki Lopez, R-Miami, was quickly approved by the House Agriculture, Housing and Tourism Subcommittee earlier this week. It would prohibit Citizens, the state-backed property insurer, from issuing or renewing a policy for a unit owner or a condo association unless the association has completed a milestone inspection and a structural integrity reserve study.

    After the Surfside condominium collapse in 2021, which killed 98 people, Florida lawmakers in 2022 required condo buildings of more than three stories tall to complete structural integrity inspections and reserve studies by Dec. 31, 2024. Only about a third of the eligible structures in the state have complied, according to state agency and news reports.

    Lopez

    Lopez said after the committee meeting that a “stick” is now required to bring condos in line and ensure safety, and that stick is blocking Citizens’ coverage. The insurer is attractive because other carriers have limited some condo coverage and Citizens is statutorily limited on rate increases and often writes at lower premiums than primary market carriers in Florida.

    As of 2024, Citizens held more than 100,411 policies in force for condominiums, including owners and associations, multi-peril, wind-only and dwelling fire policies, according to data from the Florida Office of Insurance Regulation.

    A similar Senate bill, SB 1742, does not include the Citizens prohibition. The bill’s sponsor, state Sen. Jennifer Bradley, said that adding that restriction would make things even harder for condominium associations and owners that have faced soaring repair costs and few insurance options, according to the Florida Phoenix news site.

    Others, including a condo insurance broker, agreed that the clause is unnecessary.

    “Citizens already has strict underwriting guidelines,” requiring much of the same information that HB 913 targets, said Matt Mercier, national director of community associations for CBIZ, an insurance broker and advisory firm.

    Florida law and regulations currently allow Citizens, the state’s largest property insurer, to decline to write condo properties that have not shown progress on maintenance, repairs and more. And the corporation is unlikely to bend its rules, anyway, despite some condo owners’ pleas, he noted.

    “The state of Florida shouldn’t have to back up community associations unless they have a legit, darn good reason why,” Mercier said.

    Lopez’ bill would both provide other relief mechanisms for condos trying to meet inspection and repair deadlines. The measure would, if signed into law, allow association boards to obtain loans and assess new fees for needed maintenance – without the prior approval of the association’s membership.

    Bradley

    Both Lopez’ and Bradley’s bills also would let members vote to obtain lines of credit – in lieu of reserves – to meet funding requirements for maintenance and repairs. Bradley’s bill would authorize the condo board to invest their reserve funds.

    Lopez’ bill also would impact insurance carriers directly. The measure would allow insurance coverage for condominiums to be based on the replacement value of the property, updated regularly.

    “The amount of adequate insurance coverage for full insurable value, replacement cost, or similar coverage may be based on the replacement cost of the property to be insured as determined by an independent insurance appraisal or update of a previous appraisal,” HB 913 reads. “The replacement cost of property covered must be determined every 3 years, at a minimum.”

    That could raise the cost of insurance coverage, in some cases. But Mercier said that condo claims payments already end up covering much of the full replacement costs, in many cases. Carriers’ initial payouts may cover actual cash value, but once repairs are completed, condos can claim additional expenses, he noted.

    Bradley’s bill has been assigned to committees, but hearings have not be set. The legislative session began March 4 and runs until May 2.

    Top photo: A Florida condo building after a 2024 hurricane. (Matt Mercier)

    Topics
    Florida

    Interested in Condominium?

    Get automatic alerts for this topic.



    Source link

    Recent Articles

    Closing Signs Are Signs of the Times

    It was not long ago when signs for “Help Wanted” seemed to be in every store window. That is starting to be replaced...

    10 Tips on How to Create a Gallery Wall

    You know that blank wall in your home that feels like a missed opportunity to show off your style and precious mementos? Maybe...

    Startup card GetAugie helps consumers build credit | PaymentsSource

    Patrick T. Fallon/Bloomberg There's a new option for consumers trying to build credit from scratch, and it's...

    California Insurance Commissioner Provisionally OKs State Farm’s 22% Rate Request

    California Insurance Commissioner Ricardo Lara provisionally approved State Farm’s request for a 22% interim rate...

    4 Ways to Make Learning About Money a Blast

    Forget about workbooks and flash cards. Financial-themed videos, grocery store games and even escape rooms can be a better way to teach kids...

    Related Stories

    Leave A Reply

    Please enter your comment!
    Please enter your name here

    Stay on op - Ge the daily news in your inbox

    google.com, pub-6007374308804254, DIRECT, f08c47fec0942fa0
    google.com, pub-6007374308804254, DIRECT, f08c47fec0942fa0