Florida Association Insurance 101

One of the costliest budget items for associations, and one of the fastest-changing markets in Florida, is Insurance. Associations and Boards of Directors often struggle with insurance requirements, particularly because the laws and market rates evolve rapidly. In this article, we review the primary insurance policies mandated by Florida law and discuss practical strategies for evaluating insurance companies to ensure your association secures competitive and compliant coverage.

Condo Association Insurance Types

Under Florida Statute 718 (The Condominium Act), condominium associations are required to carry several insurance policies to help ensure that day-to-day operations and the well-being of residents are protected. These include:

• Property insurance (casualty insurance)

• General liability insurance

• Fidelity bond/employee dishonesty insurance

These policies are mandated to provide associations with a baseline of coverage, helping to shield them from significant financial or legal repercussions arising from issues that could have been prevented or mitigated under state law. In addition, there are other policies that are required under certain circumstances or recommended plans within the industry. These plans are as follows:

• Directors & Officers (D&O) insurance

• Workers’ compensation (required if there are four or more employees)

• Flood insurance (required if the condominium is in a FEMA-designated Special Flood Hazard Area (SFHA) and has a federally backed mortgage)

• Umbrella/Excess liability insurance

• Cyber liability insurance

Carrying these supplemental policies may be legally required in some cases or wise for associations looking to minimize risk. Failure to maintain adequate coverage can result in serious legal and financial consequences if a court deems negligence contributed to a loss or dispute. Please seek legal counsel for exactly what is and is not required by law for your association.

Emerging Regulatory & Market Dynamics

Florida’s insurance market has experienced ongoing changes in recent years, including carriers leaving the state or tightening underwriting standards. Milestone Inspections and Structural Integrity Reserve Studies (SIRS) are also increasingly required for certain buildings, particularly those over three stories. These reports can significantly affect underwriting decisions and premiums:

• Milestone Inspections: Identifies structural deficiencies and safety concerns, which underwriters will often review when quoting or renewing coverage.

• Structural Integrity Reserve Studies: Evaluates the long-term repair costs for critical building components. Providing up-to-date reports can help associations secure more favorable rates by demonstrating proactive maintenance and risk reduction.

Monitoring legislation and rule changes from the Florida Office of Insurance Regulation ensures that associations maintain compliance and avoid unexpected premium hikes.

The Do’s of Insurance Policy Renewal

• Start the Renewal Process Early (at least 6 months out): Schedule multiple insurance agents to present at board meetings so you can compare and select the best match for your association’s needs.

• Vote on the Agent of Record: Once you identify a preferred agency, hold a legal board meeting to vote on and document the choice. Signing an “agent of record” letter empowers the chosen agent to market your association’s coverage to carriers on your behalf.

• Follow Up Early (90–120 Days Before Renewal): Confirm with your agent of record that they have started securing bids. This gives you time to compare offers and negotiate effectively.

• Organize Key Documentation: Keep past insurance claims, wind mitigation inspection reports, Milestone and SIRS, the mandatory 3-year insurance evaluation, current budgets, and copies of existing policies ready. Insurance carriers may request up to five years’ worth of documentation.

The Don’ts of Insurance Policy Renewal

• Don’t Wait Until the Last Minute: Beginning your insurance search under 90 days before renewal often yields fewer options and insufficient time to vet carriers properly.

• Don’t Sign an Agent of Record Immediately: Require prospective agencies to demonstrate their added value through presentations and data before granting them exclusivity.

• Don’t Involve Multiple Agents for the Same Policies: Insurance carriers only provide a quote to the first agent who requests it, effectively blocking subsequent agents from receiving quotes.

Summary

Insurance policy renewal for condominium associations in Florida can be stressful and overwhelming—particularly if left until the eleventh hour. Proper planning ensures that associations remain compliant with state regulations and avoid the pitfalls of insufficient coverage or excessive premiums. If your association needs guidance on renewing policies or navigating the complexities of Florida’s changing insurance landscape, feel free to reach out to us at info@managewithaurora.com.