BILL: CS/CS/SB’s 2086 & 2498
property and not the association. Legislation is needed, argue these representatives, to clarify what are or are not considered to be common expenses payable by all condominium unit owners in the event of reconstruction following a casualty.
OIR Report on Condominium Insurance Legislation enacted in 2003 amended s. 718.111(11), F.S., to require the OIR to prepare for publication 18 months from the effective date of the act a report evaluating premium increases or decreases for associations, unit owner premium increases or decreases, recommended changes to better define common areas, or any other information the OIR deems appropriate.6 In November 2004, the OIR published its report, which concluded that premiums had increased over the past few years at a “moderate rate.”7 The report also found that the insuring responsibilities for condominium property are generally clear and recommended that the 2003 legislative changes to the condominium insurance provision be allowed to fully impact the marketplace. Finally, OIR recommended that enhanced consumer outreach programs be instituted to facilitate continued insurer entrance into the admitted market and improved education of the insurance buying public.
Other Insurance Provisions Section 718.111(11)(a), F.S., provides that it is a breach of fiduciary responsibility by an association’s developer-appointed board of directors to fail to obtain and maintain adequate insurance during any period of developer control, unless the board members can show that despite such failure, they have exercised due diligence.
Section 718.111(11)(a), F.S., also provides that the declaration of condominium may require that condominium property consisting of freestanding buildings where there is no more than one building in or on such unit need not be insured by the association if the declaration requires the unit owner to obtain adequate insurance for the condominium property. This provision relates to what is known as “land condominiums.” A “land condominium” is composed of separate parcels of land. The units are the separate parcels. Each unit may have one or more buildings in or on each parcel.
Section 718.111(11)(a), F.S., also authorizes condominium associations to obtain and maintain liability insurance for directors and officers, insurance for the benefit of association employees, and flood insurance for common elements, association property, and units.
Section 718.111(11)(a), F.S., provides that “adequate insurance” may include reasonable deductibles as determined by the board based upon available funds or predetermined assessment authority at the time that the insurance is obtained. Associations may have a reasonable deductible even if the declaration of condominium requires coverage by the association for “full insurable value,” “replacement cost,” or the like. Section 718.111(11)(a), F.S., also permits condominium boards to consider available funds or predetermined assessment authority when determining whether they have the statutorily required “adequate insurance.”
Chapter 2003-14, L.O.F. (SB 592). Florida Office of Insurance Regulation, Condominium Insurance Report, November 19, 2004.