(Note: this guest blog is by Jeremy Tyler, an attorney with Merlin Law Group in the Coral Gables office).
I am very excited to have the opportunity to contribute to this blog. Shaun Marker and I will be contributing to the Condominium Insurance Law Blog each Monday. Please check back frequently, as we have a lot to discuss.
For starters, in the recent legislative session, the Florida Legislature made numerous changes to Florida Statute § 718.111, which regulates condominium associations. For this blog, I’ll focus on the changes the Florida Legislature made to § 718.111(11) that deals with condominium insurance.
First, the Florida Legislature clarified many parts of the condominium insurance statute. The Legislature modified the insurable interest of the master condo policy by changing the basis for coverage from “full insurable value” to “replacement cost.” This replacement cost must still be evaluated every 36 months. The Legislature clarified the type of insurance required by changing “casualty” and “hazard” insurance to the much more appropriate “property” insurance. It also clarified which property is the responsibility of the unit owner by adding language defining unit owner property as that “which are located within the boundaries of the unit and serve only such unit.”
Second, the Florida Legislature made several changes to Florida Statute § 718.111(11)(g), which regulates unit owner policies. The Legislature moved the loss assessment coverage provisions that were found in § 718.111(11)(g) to the newly created Florida Statute § 627.714, and expanded the requirements for loss assessment coverage. Most notable to condominium association boards and unit owners are the provisions of § 718.111(11)(g) that didn’t make the move over to § 627.714.
Unit owners will no longer be required by statute to purchase unit owner insurance policies or provide them to the association upon request. The unit owner will also no longer be required to list the condo association as an additional named insured and loss payee on a unit owner policy. Unit owners will still be responsible for the cost of reconstruction of any part of the condominium that he or she was otherwise required to carry property insurance on, and the association may still charge back to the unit owner any costs of reconstruction of unit owner property that is undertaken by the association.
The big change for the association is that it will no longer be allowed to purchase insurance on behalf of the unit owner at the unit owner’s expense if the unit owner does not purchase a policy on his or her own. This “force place” insurance that was added to the statute in 2008 (effective January 1, 2009) will be removed when the new law takes effect on July 1, 2010.