Required Insurance Appraisals for Florida Condominium Associations

For many condominium association boards of directors, the fall months are considered “budget season” because this is the time the board members and property manager work together to produce a budget for the start of the new fiscal year in January. While condominium association budgets address a variety of things, property insurance is one significant line item that cannot be overlooked.

As part of property insurance, one item that all Florida associations must consider for their budgets is the cost for an insurance appraisal that determines the “full insurable value” or “replacement cost” of the association property.

Florida Statutes 718.111(11)(a) requires all condominium associations to have “adequate” hazard insurance. To comply with the statute, a condominium association is required to have an insurance appraisal of the condominium property at least once every 36 months (3 years):

(11) INSURANCE.—In order to protect the safety, health, and welfare of the people of the State of Florida and to ensure consistency in the provision of insurance coverage to condominiums and their unit owners, this subsection applies to every residential condominium in the state, regardless of the date of its declaration of condominium. It is the intent of the Legislature to encourage lower or stable insurance premiums for associations described in this subsection.

(a) Adequate 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, 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.

As noted, the determination can be “by an independent insurance appraisal or update of a prior appraisal.”

Since we are nearing the end of 2017, now is a good time for all condominium association managers and boards of directors to confirm when another update of an appraisal is needed so there is ample time to comply with the statute.

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