I received several questions on my last post regarding the force place insurance provision that will be removed from Fla. Stat. § 718.111(11) on July 1, 2010. This week, I explain the history of the provision to clarify some of the information I provided two weeks ago.
Prior to 2003, condominium insurance policies were anything but uniform. There were huge discrepancies between different condominiums and the insurance policies that they purchased, including what was covered under each of these policies. Some condominium association policies covered everything, while others covered only common elements, leaving individual unit owners to insure their respective units.
In 2003, the Florida Legislature decided to enact standards for insurance purposes by defining the responsibility of the association and the responsibility of the unit owner. Comprehensive legislation was passed effective January 1, 2004, that required condominium associations to insure structures and common elements, such as walls, roofs, and foundations. Unit owners were responsible to insure the interior of their own unit, including drywall, window coverings, flooring and appliances.
In 2008, Florida State Representative Matt Hudson, R-Naples, headed the effort to add a force place insurance provision. This provision, which became effective January 1, 2009, allowed condominium association owners to purchase and assess unit owner insurance policies for unit owners that failed to insure their own units. Representative Hudson told the Palm Beach Post that the purpose was to help prevent the condominium association from being stuck with the bill when problems in one unit caused damage to another unit.
Unfortunately, condominium attorneys quickly pointed out that allowing a condominium association to force place insurance could open them up to liability if they failed to force place insurance on an uninsured unit owner that later caused damage to another. In essence, a unit owner who suffered damage caused by an uninsured unit owner could sue the association if the association had not purchased a unit owner policy for the offending uninsured unit owner.
These same attorneys argued that under the 2009 economy, most condominium associations were not in a financial position to purchase and force place insurance on unit owners, and urged state lawmakers to postpone this requirement until the economy rebounded. It appears that this argument has worked, since the force place provision will be removed on July 1, 2010. Although the provision will be repealed, associations and unit owners would be wise to keep an eye out for it on the horizon in the years to come, as it may reappear in a future legislative session in a more favorable economic climate.