Understanding Florida’s Statutory Insurance Requirements for Condominium Associations

Every condominium association should have insurance, which is precisely why Florida law requires them to have insurance. Associations must use their best efforts to obtain and maintain adequate insurance to protect the association’s property. Florida’s minimum mandatory insurance requirements apply to every residential condominium, regardless of when the association was created.

Property Insurance. Condominium associations are required to have adequate property insurance. Coverage must be based on the replacement cost of the property, even if the declaration of condominium provides otherwise. The replacement cost must be determined by an independent insurance appraisal at least once every 36 months.

The association’s policy must provide primary coverage for:

  • all portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications; and
  • all alterations and additions that were properly made to the condominium property.

The law identifies specific types of property that unit owners must insure themselves. Consequently, the association’s policy must exclude coverage for the following property if it is located within the boundaries of a unit and serves only that unit:

  • personal property within units or limited common elements;
  • floor, wall and ceiling coverings;
  • electrical fixtures, appliances, water heaters and water filters;
  • built-in cabinets and countertops; and
  • window treatments (curtains, drapes, blinds, hardware, similar components).

Policies may include a deductible, but it must be consistent with industry standards and prevailing local practices for communities of similar size, age, construction and facilities. The board must hold a meeting to establish the amount of the deductible based on the level of available funds and predetermined assessment authority.

Fidelity Bonding. Condominium associations must have insurance or fidelity bonding covering every person who controls or disburses funds, including the association’s president, secretary and treasurer, and any person authorized to sign association checks. The policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time.

Other Insurance. Florida’s Condominium Act authorizes associations to obtain other types of insurance, including:

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