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Q&A: Condo Insurance Requirements

Posted in Insurance, Reader Q&A

Readers have submitted quite a few questions in the last few weeks regarding insurance for condominium property and responsibility for repair of damages.  Section 718.111(11), Florida Statutes, requires every condominium association to maintain insurance coverage for:

  • All portions of the condominium property as originally constructed (including replacements of like kind); and
  • All alterations or additions to the common elements or association property made in compliance with Section 718.113(2), Florida Statutes, but excludes:
  • Floor, wall or ceiling coverings, electrical fixtures, water heaters, water filters, cabinets, countertops, appliances, window treatments and personal property within the units.

Every unit owner is required to carry coverage for their unit and any improvements or modifications made to their unit (or limited common elements).  Unit Owner coverage must:

  • Be excess to the association’s coverage;
  • Contain at least $2,000 of loss assessment coverage; and
  • Name the association as an additional insured and loss payee on the casualty portion of the policy.

 As for specific questions by readers:

 What is the new law concerning condo air-conditioners? Is there a new law?

The association’s insurance policy must include coverage for the HVAC system – the air conditioning units, compressors, thermostats, duct work, etc., when in the past air conditioners serving the unit were insured by the individual unit owner.  Community leaders and managers make sure these items are included in the current appraisal so there is enough coverage in the event of a loss.

I have heard from someone that this LAW (just the other day) has been overturned ..can you verify this?

 

The Florida legislature passed a bill that would have eliminated the Unit Owner coverage mandate, but that bill was vetoed by the Governor.  Consequently, every Unit Owner is required to purchase insurance coverage and provide evidence of the coverage to the association when asked.  If the Unit Owner fails to comply, the association actually has the option of buying coverage for the unit and charging the owner for the expense.   The charges can be included in a lien against the unit and the association can foreclose if the owner still refuses to reimburse it for the insurance expense.

For more information regarding the vetoed bill, please refer to an earlier post by clicking HERE.

What happens when there are damages from a roof leak, a burst pipe, a toilet that overflows?  More reader questions regarding damages later this week….

  

  • Bernard Todrtin

    Regarding this legal message re: condominium owners personal property and air conditioner and insurance coverage for same, does this also apply to a Homeowners Association unit.
    I would appreciate your answer.
    Thank you,
    Bernard Todrin

  • Petra

    Hello,
    Our HOA has dropped all hazard insurance for the common areas. They only have liability coverage. When I mentioned that for this to be legal, we must have a state approved reserve fund, the board insisted that in was in error and no reserve is necessary. Our common areas are the streets, gazebo, dock, lighting as well as landscaping. In the event of any disaster the HOA as well as owners would be in distress. True or false

  • Carolyn Wieman

    Are there any signs from legislators that they will try to get the homeowner policy part recinded this legislative session?

  • Marcie

    With regard to HVAC for individual units now being covered in the buildings’ insurance policy. Does this mean that if an AC unit requires maintenance and or replacement that that Condominium Association has to maintain it or pay for it?

  • Don

    The Association is not rewquired to insure items inside a unit such as window treatments, appliances, personal property, and other such items as stated in your column. The third bullet under “Section 718.111(11), Florida Statutes, requires every condominium association to maintain insurance coverage for: ….: is incorrect

  • Lisa Magill

    The insurance law refenced in this post only pertains to condominiums, not cooperatives or homeowners associations.
    Responsibility for insurance coverage in homeowners association run communities is set forth in the governing documents. The documents may be confusing, especially if the property contains attached homes.
    I understand that removing the unit owner insurance mandate for condominiums is one of the priority issues to be addressed in 2010. Please refer to CALL (www.callbp.com) to keep up-to-date on legislative activities.

  • Don

    A friend of mine is renting a condominium directly from an owner. She came home to find a notice on her door that the owner is being foreclosed on by the bank. Her lease is not up for another 7 months. Does she need to move out or can she stay until the end of the lease. There have been no eviction notices filed to date. Thanks

  • jeff

    the statute doed not require that homeowners insurance
    must be purchased, only that proof of coverage shall be provided when requested: don’t ask, don’t tell.
    Bad law + bad governor = insurance company profits
    Response: Actually, that’s not true. The Law doesn’t include a penalty against the Association for failing to obtain the insurance certificates (or other evidence of coverage), but each unit owner is required to maintain insurance.

  • WILLIAM TOW

    I OWN A CONDO IN A BLDG THAT HAS THREE STORIES IN ONE SECTION AND 4 IN THE OTHER. I AM CONCERNED ABOUT THE
    MANATORY SPRINKLER SYSTEM THAT IS BEING REQUIRED IN A
    FEW YEARS.
    WHAT CAN I EXPECT FROM THIS NEW LAW?
    thanks,William tow

  • R. Balzan

    Due to water overflows from units above our unit, mold has developed in the walls of our unit. One incident involved the sprinkler system going off in a unit. The other incident involved a toilet overflow. Who is responsbile to pay for mold abatement, the individual unit owner or the association?

  • W. Donovan

    Who is responsible? I noticed a very foul smell isolated inside my Master bathroom vent fan,[Live on the 5th floor]as if something had died. In the meantime, the smell became overbearing, so I taped plastic over the vent fan to help keep the odor out with uncertainty of possible diseases from a bird, parasites or droppings. Removed birds nest and debris within ductwork all the back into the overhead within main hallway?

  • Catherine Donnelly

    Would a $2,000.00 surety bond replace the $2,000.00 insurance requirement for the self insured?

  • R. McCoy

    Our Condo Association is somewhat different in that we have 50% individual homes with 50% attached. All are with individual air conditioning units. Does the Association have to insure 120 separate AC units?

  • Maria Smith

    Would like to know if there is a law that cap’s off the maintenence fees for apartments. The bldg I’m talking about charges $735 MONTHLY for a 1050 sq apt; and $545 MONTHLY for 740 sq. This bldg has not facilities whatsoever (no gym, no meeting place, bbq area is completely destroyed, just like the very few green areas in general). Is there a regulation or something that would help apt. owners fight back? Unfortunately, most of us are struggling to pay the mortgage, now imagine the maintenence fee!!!!! Thanks!

  • Tback

    If, when requested proof of coverage is not provided; is the remedy for the HOA to fine the Unit Owner … and then to secure the insurance on behalf of the Unit Owner? At the same time putting a lien on the property?
    And ultimately does the lien hold up if the bank takes possession of the property as part of a foreclosure? Or is this considered part of the HOA assessments and thus only subject to 1% or 6 months of fees — whichever is less?

  • Tback

    Follow up to post on Oct 25.
    Reviewing the FL Statute, under definition, ASSESSMENT is defined as:
    1) “Assessment” means a share of the funds which are required for the payment of common expenses, which from time to time is assessed against the unit owner.
    So, my conclusion is that a fine/lien for insurance, since it isn’t a “common expense”, should be payable before title transfer … regardless whether transfer is by means of foreclosure.
    True?

  • Tback

    Follow up to post on Oct 25.
    Reviewing the FL Statute, under definition, ASSESSMENT is defined as:
    1) “Assessment” means a share of the funds which are required for the payment of common expenses, which from time to time is assessed against the unit owner.
    So, my conclusion is that a fine/lien for insurance, since it isn’t a “common expense”, should be payable before title transfer … regardless whether transfer is by means of foreclosure.
    True?

  • Elaine Smith

    Our Condo unit was shut down and unoccupied for 4 months in the summer. A temporary renter(now gone)in the above unit deposited material into the drainage system that caused a sewer backup into our unit resulting in severe mold contamination and extensive cleanup. The association ins. will not reimburse us. Is the owner in the above unit liable? Can we sue the owner of the unit to recover damage?

  • elaine smith

    HO6 quotes include terms like medical payment, dwelling, unit-owners coverage.
    where are these coveragaes defined? Is ther a minimum deductabael for HO6. What is the minimum necessary to comply with this law?
    Response: Section 718.111(11)(g), Florida Statutes defines the required unit owner coverage. It does not set forth amounts or deductibles, but does require $2,000 of “special assessment” (loss assessment) coverage.

  • N.M.N.

    When SB 714, relating to condo unit owners having insurance was passed by the Governor, the bill made it mandatory that every condo owner have insurance, and that the association request proof of such, and keep the record on file. When I had my insurance company send proof, I was told they, the board, were not going to ask for proof, they were going to follow the honor system. I know of at least two owners who do not have insurance. Is this something we, who have insurance, should be concerned about? Is this a law that will cause our association to be fined for not complying? Shouldn’t they by law, check on this?

  • ms

    I have a quick question:
    Which one supersedes each other:
    1. the condo docs or
    2. the F.S. 718
    I need clarification. There is a new law for water leaks in condo units whereby the condo associaton is responsible for the dry-wall replacement (both inside the unit and common elements) and the condo owner is responsible for the “unit content.”
    As an example, if the condo docs say something different than above, which one RULES?
    RESPONSE: Responsibility for insurance and maintenance/repair are often confused. F.S. 718.111(11) addresses insurance issues and repair after casualties. A water leak may, or may not, be considered a casualty. The law requires the master association to include drywall coverage in its policy, but that doesn’t mean insurance coverage is applicable every time the walls are damaged or need of repairs. Check with your insurance company as to whether the water leak qualifies as a casualty. If so, you can then ask the association’s insurance agent about the status of the claim.

  • Ted Parker

    In an effort to contain cost of property insurance, many Florida condo associations are opting for higher deductibles. In cases of 5% hurricane and $25,000 other peril deductibles, if an associations elects not to insure a $5,000 gazebo,…do they violate Sec. 718.111(11)? Does the statue allow a condo association to vote to exclude all low value common area properties ?
    Thanking you in advance for your answer
    Ted Parker

  • M Matherson

    Situation:
    Above unit water heater burst cause a flood of upper unit and water damage to my unit before i purchase it. After purchase found cracks in exterior stucco cause flooding of my master bath which was pointed out to the association. Now the unit has mold.
    Who’s insurance is responsible for mold restoration and drywall?

  • Steve

    With regard to HVAC for individual units now being covered in the buildings’ insurance policy. Does this mean that if an AC unit requires maintenance and or replacement that that Condominium Association has to maintain it or pay for it?
    I noticed this question, posted in September 2009 but did not see an answer. Cany anyone tell me where to look for documentation?

  • Steve

    With regard to HVAC for individual units now being covered in the buildings’ insurance policy. Does this mean that if an AC unit requires maintenance and or replacement that that Condominium Association has to maintain it or pay for it?
    I noticed this question, posted in September 2009 but did not see an answer. Can anyone tell me where to look for documentation?

  • Steve

    With regard to HVAC for individual units now being covered in the buildings’ insurance policy. Does this mean that if an AC unit requires maintenance and or replacement that that Condominium Association has to maintain it or pay for it?
    I noticed this question, posted in September 2009 but did not see an answer. Can anyone tell me where to look for documentation?
    RESPONSE: Under §718.111(11), F.S. the Association is only responsible for repairs (or replacement) of the HVAC components as a result of casualty loss. Maintenance or other repairs are generally the responsibility of the owner or as outlined in the condominium documents.

  • fe

    Can anyone tell me were in the §718.111(11), F.S is mentioned the HVAC for individual units? I read it and did not find any specific comment on the HVAC. Can anyone tell me where it is stated that now the building’s insurance policy has to cover these items?
    By the other hand, the HVAC in each unit benefit only that single unit, and in §718.111(11)(g)(1) is stated:
    “1. All improvements or additions to the condominium property that benefit fewer than all unit owners shall be insured by the unit owner or owners having the use thereof, or may be insured by the association at the cost and expense of the unit owners having the use thereof.”

  • Chris Kittleson

    Question – Air conditioning lines, i.e. liqiud/suction lines were found to be leaking as per qualified AC Contractor. Air handler is on first floor and compressor is on roof of a five story building. AC contractor indicated repairs would require replacement of both lines from roof to unit on 1st floor. This repair scenario requires the potential for the requirement to access the “chase” for each of the four units above my unit in order to bring the new copper lines to my unit for repair. Since it is impossible according to the AC contractor to “fish” the copper lines through the chase, how does one address this difficult repair action and even more importanatly who would be responsible for all of the work to gain access to the chase in the four other Units, i.e. cutting the wall and/or removal/reinstallation of their respective air handler.
    Any advice would be appreciated.

  • Murrf

    718.111 states that the master policy must cover HVAC. Is it mandatory that the association is responsible for repairs, maintenance and replacement of the HVAC, if needed? Or is it the unit owners responsibility? A compressor on the roof needs to be replaced because the vibration is a disturbance to top floor neighbors? Who pays for it?
    RESPONSE: This is an issue that confuses many people. The responsibility to insure is completely different than the responsibility to maintain, repair and replace under non-casualty circumstances. Please check the site for more information regarding this very issue.

  • Peter

    Is the condo association board required to advise the condo owners the amount of the deductible under the property policy and the possible assessment to each unit owner based upon the ownership interest. If so under what section of the statutes does this apply
    REPONSE: The condominium act changed in 2010. The Board is still required to vote on deductibles at properly noticed meetings. Please review Section 718.111(11), Florida Statutes.

  • Cece Campbell

    I, along with five other unit owners, have a storage area in the basement of the condominium building. The storage areas are considered “Limited Common Area” and are located within common area. For years, we have endured the growth of mold in our storage areas. I recently complained about the lack of ventilation, fans, dehumidifiers, etc. to combat this problem. Our storage areas contain wall areas that are the old fieldstone foundation. Because of past water leaks, etc., and high humidity in the entire basement, mold has grown within my storage area.
    The property manager and trustees have determined that I must pay for the mold remediation of my storage area because it is limited common area. I initially complained about this mold situation feeling that it was a sanitary and health issue. Can I be forced to pay for this remediation? If some (chicken wire) storage areas are not remediated, will the mold return? I live in Massachusetts and cannot get an answer to this question: Whose responsibility is it to create a healthy condition for storing items. Even though I have limited common area, am I responsible for keeping the humidity low for the entire basement?
    Thank you for your opinion.
    K. Campbell
    RESPONSE: The Declaration of Condominium allocates responsibility for the maintenance and care of the property. The Declaration may say that unit owners bear responsibility for maintenance and care of limited common elements.

  • linda

    Does the Florida law that states home insurance is not required if the home is owned outright superceed our HOA bylaws requiring proof of insurance by each unit owner?
    RESPONSE: When you buy a home within a deed restricted community (HOA) you are agreeing to comply with the terms and conditions set forth in the governing documents.

  • vanessa

    my air conditioning stopped working. I called a repair company and the company told me that the inside copper lines were leaking and needed to be replaced. I live on the second floor and all there are 3 units in my condo. All lines are crossed under a chase. Isn’t the condo assoc responsible for fixing the lines since they are inside the walls and we have to run the lines from the 1st floor to the second floor? Thank you.
    RESPONSE: I see this question (or variations on this question) a lot. Responsibility for maintenance and repair of certain portions of the condominium property are set forth in the Declaration of Condominium. There is no ‘hard’ rule whether the association or the unit owner maintains a/c lines.

  • http://www.home-insurance-florida.net Michelle

    Due to water overflows from units above our unit, mold has developed in the walls of our unit. One incident involved the sprinkler system going off in a unit. The other incident involved a toilet overflow. Who is responsbile to pay for mold abatement, the individual unit owner or the association?
    RESPONSE: Check out the posts “When it rains” and “Mold problems” on this blog – these questions involve complicated issues regarding maintenance, insurance, and reconstruction after casualty, among others. Many of the answers depend on the governing documents and fact-specific issues.

  • john mlcahy

    If condo association assoc. enters my unit to correct assoc. water drain problem ( in wall between units) that is association problem, I’m not causing any damage but happen to be an unoccupied unit, and the association enters my unit(I’m not prersent, water is shut off)removes my counter top, opens up wall to get at leak; who is responsible for paying for wall painting and counter top replacement?
    RESPONSE: Please look at the posts regarding insurance and incidental damages on this site. We will include more information regarding insurance and damages to the condominium property in the future. However, in most cases the determination of responsibility depends upon the specific facts and circumstances.

  • HUBERT MCGAUGHEY

    I LIVE IN A 14 UNIT BUILDING. WE ARE A COOP. ARE WE REQUIRED TO HAVE HURRICANE INSURANCE. SOME OWNER DO AND SOME OWNERS DO NOT.
    RESPONSE: The cooperative law (Chapter 719, F.S.) doesn’t require individual owners to buy insurance. The association may want to amend its governing documents to regulate or mandate insurance responsibilities.

  • Ro

    Please could you tell me in ref to condo insurance;
    can the insurance co. oblique you to get 50.000 coverage for damages? And 20.000 for personal property,they say is minimum; but we do not even have that much.
    Thank you!
    RESPONSE: Insurance carriers are regulated by the government, but each policy is different and each carrier has its own requirements or guidelines. I suggest you speak with a licensed agent who can explain what coverage options are available.

  • Wayne

    Is there a Florida Statue that states a/c units must be secured to the roof of a condo. We have a building that is 30 years old and the units have never been anchored to the roof.
    RESPONSE: There is the Florida Building Code and local amendments or supplements to the building code. You can ask the local building department or permitting authority for a copy of the provision that speaks to this issue.

  • Rich

    Is there requirements of condo associations pertaining to:
    1) The availability of the directors to perform new owner interviews.
    2) The time limit that interviews must be performed by after notification.
    RESPONSE: Transfer (sale and lease) approval requirements are set forth in the applicable governing documents. Most of them do impose time constraints upon board action. Many of them provide that the transaction is automatically approved if the board (or committee) fails to act within a certain period of time.

  • gary lloyd

    I read over and over that responsibility for damage (water from supply lines for example) within a condo unit is the responsibility of the unit owner. If the water supply lines are within the common area walls behind a condo unit’s walls, and since these pipes are the responsibility of the condo association to maintain, how can the condo association not be liable to make all repairs caused by these common area pipes?
    RESPONSE: The condominium act sets forth the scope of coverage for the association. Property insurance is different than liability insurance. Property insurance pays for damages to property included in the policy coverage, if damage was as a result of a casualty.
    You refer to a liability concept of responsibility. Sometimes the documents impose a strict liability standard, most do not.

  • gary lloyd

    I read over and over that responsibility for damage (water from supply lines for example) within a condo unit is the responsibility of the unit owner. If the water supply lines are within the common area walls behind a condo unit’s walls, and since these pipes are the responsibility of the condo association to maintain, how can the condo association not be liable to make all repairs caused by these common area pipes?
    RESPONSE: The condominium act sets forth the scope of coverage for the association. Property insurance is different than liability insurance. Property insurance pays for damages to property included in the policy coverage, if damage was as a result of a casualty.
    You refer to a liability concept of responsibility. Sometimes the documents impose a strict liability standard, most do not.

  • Huberrt McGaughey

    I live in a 14 unit building that is a co op. At the yearly meeting it was voted to self insure, however, there
    is no reserve fund. I voted for hurricane ins. coverage.
    Is it legal to self insure with no reserve fund?
    RESPONSE: Self-insurance does not mean no insurance. The statute doesn’t dictate exactly what coverage a cooperative association must obtain, so there is a big difference between cooperatives and condominiums regarding insurance. Section 719.104(3), F.S. does require the cooperative association to obtain and maintain ‘adequate’ insurance to protect the association property. Please discuss this issue with counsel and/or your insurance consultant/agent.

  • Delores Burnett

    My condo association says that the Assoc. By-Laws overrides the Fl.Statutes. Sec 718.111(11)(f) #1,2 s718.113(2). Mar.10,2011-60mph winds damaged a window,The window is open to the elements. They only repair windows with names like Wilma ,etc. The high winds are documented . Question–Can a Association ignore the Fl.statutes? Also there is no statements about the”winds in By-Laws.
    RESPONSE: The association must have the coverage required by the condominium act. The condominium act contains provisions governing repair and reconstruction after a casualty, along with options to change that procedure by membership vote. I suggest you contact the agent to report the damage claim and allow the carrier to conduct an investigation.

  • Ron J.

    1) I am having a hard time pin pointing where the condo assn. is required to replace HVAC units, was this removed or am I just missing it?
    2) I was not aware insurance beyond the “Flood Insurance” was required by unit owners, when did that change?
    3) I’ve recently had an issue with pipes leaking behind the walls of my unit. I’ve replaced them at my own expense since I did not have insurance. I do plan to purchase insurance at this point (both because the issue was expensive, and now I see it’s required), what sort of repercussions do I face for not having had it up to this point?
    4) The unit below me is claiming to have damage from the incident. In reading 718.111, does “Such property and any insurance thereupon is the responsibility of the unit owner.” imply that any damage down below falls upon their insurance, and not me (or my insurance even if I had it at the time)?
    Thank you,
    Ron
    RESPONSE: The scope of a condominium association’s master coverage is set forth in Section 718.111(11), Florida Statutes. The statute was amended in 2010 to remove a provision mandating individual unit owner coverage – although many associations create rules requiring coverage.

  • Bob Mohrbacher

    Our Condo Asociation recently had to assess all 48 unit owner $2,000 to replace stolen funds. Unit owners submiited clains to their individual insurance companies. A few companies reimbursed their policy holders, most did not. I’ve been told assessment insurance is for losses incurred by an insurable event such as a named storm or fire. Assessments that involve theft or unbudgeted expenses are not. How are “common expenses” defined.

  • Bob Mohrbacher

    Our Condo Asociation recently had to assess all 48 unit owner $2,000 to replace stolen funds. Unit owners submiited clains to their individual insurance companies. A few companies reimbursed their policy holders, most did not. I’ve been told assessment insurance is for losses incurred by an insurable event such as a named storm or fire. Assessments that involve theft or unbudgeted expenses are not. How are “common expenses” defined.
    RESPONSE: In Florida condo associations are supposed to have a fidelity bond in place, which is basically insurance for theft – its typically called an employee dishonesty policy or a fidelity bond.
    Every loss assessment provision in individual homeowner policies is different. You would have to look at your policy to see if there is any coverage for your assessment.
    Common expenses are defined by statute and by the governing documents. Refer to Section 718.115, Florida Statutes.