Florida Insurance Premiums: How We Got Here, What to Expect, & Your Questions Answered – Insights from Association Leadership Webinar Series S6, E5

 

In the latest episode of Castle Group’s Association Leadership Webinar Series, Season 6, Episode 5, the expert panel discussed Florida’s rising insurance premiums, the factors driving costs, and what associations can do to mitigate expenses. The live webinar features Craig Vaughan, Castle Group’s CFO, and Industry experts Jeff Rembaum, Michael Bender, and Andrea Northrop, who provided valuable insights into legislative updates, insurance market trends, and best practices for associations.  

Legislative Updates Impacting Insurance  

Kaye Bender Rembaum’s attorney, Michael Bender, shared updates on proposed bills that could impact association insurance regulations. Two key bills, Senate Bill 1742 and House Bill 913, address milestone inspections and Structural Integrity Reserve Studies (SIRS). The Senate bill proposes an extension for SIRS deadlines and includes provisions for reserve fund investment and lines of credit for reserve funding. However, both bills need to be reconciled before they can be enacted.  

Another critical legislative development includes proposed restrictions on Citizens’ Insurance coverage for associations that fail to meet milestone inspection requirements. Ongoing investigations into insurance companies’ financial health may lead to further legislative action.  

Florida’s Insurance Market: Past and Present  

Andrea Northrop provided an overview of Florida’s property insurance market, highlighting the significant fluctuations over the past two decades. After a soft market period from 2012 to 2019, where new carriers drove competition and rates dropped, the market began hardening in 2019. Increased natural disasters, rising reinsurance costs, and insurer insolvencies led to a sharp spike in premiums.  

However, some associations are seeing relief for the first time in five years. New carriers have entered the market, and reinsurance costs have stabilized, leading to potential premium decreases, particularly for associations investing in property improvements like roof replacements and upgraded storm protections.  

Key Insurance Considerations for Associations  

Property Insurance: Some associations are experiencing rate reductions between 5-40%, especially those that have completed significant building upgrades. However, homeowners’ associations (HOAs) without large property assets are seeing less relief.  

General Liability & Directors and Officers (D&O) Insurance: These policies are becoming more expensive as insurers account for increased legal risks related to milestone inspections and structural repairs. Insurers are also tightening underwriting standards, leading to increased rates and reduced coverage limits.

Umbrella Coverage: Many associations that previously carried high umbrella limits are seeing reduced availability. While $50 million policies were common in the past, most associations are now limited to $25 million or less, with rate increases of 50-60%.  

Fidelity Insurance: Both condominium and homeowner associations must carry fidelity insurance to cover all cash balances, including reserves and special assessments. Given the rising reserve requirements, associations should review their coverage limits regularly.  

Legal Insurance Requirements for Associations   

Kaye Bender Rembaum’s attorney, Jeff Rembaum, emphasized that Florida condominium associations are legally required to carry insurance under Statute 718.111(11), covering all components not insured by unit owners, such as structural and shared elements. Unit owners are responsible for insuring interior items like flooring and appliances through HO-6 policies, which are strongly recommended but not mandated. Condominium associations (COAs) must follow their governing documents to determine insurance obligations. While self-insurance is technically permitted, it is extremely rare and complex, requiring substantial resources and expertise. Jeff also highlighted the importance of flood insurance—even outside designated flood zones—since property policies will not cover rising water damage. Additionally, both condominiums and HOAs must maintain fidelity bond coverage equal to their peak cash balances, and associations should always have their insurance agent review vendor contracts to ensure proper liability coverage.  

Strategies for Managing Insurance Costs  

Associations can take proactive steps to control their insurance expenses:  

• Building Improvements: Investing in new roofs, impact windows, and other mitigation measures can reduce premiums by up to 30%.  

• Higher Deductibles: Evaluating deductible options may lead to cost savings, but associations must ensure compliance with Fannie Mae lending requirements.  

• Reviewing Financing Options: Many associations finance their premiums. Comparing premium financing rates and considering revolving lines of credit can lower overall costs.  

• Engaging with Insurance Agents Year-Round: Regular communication with insurance professionals ensures that associations stay informed about market changes and potential cost-saving opportunities.  

As Florida’s insurance landscape evolves, associations must remain proactive in managing their risk exposure and expenses. Legislative changes, market fluctuations, and structural improvements will all shape the cost of insurance in the years to come. Staying informed and working closely with insurance professionals will be key to navigating this complex environment.  

To watch the full webinar on Florida Insurance Premiums: How We Got Here, What to Expect, & Your Questions Answered, visit https://castlegroup.com/webinar/asl-s6e5-florida-insurance-premiums-how-we-got-here-what-to-expect-your-questions-answered/.  

To learn more about how Castle Group can serve your community, request a proposal at https://castlegroup.com/request-a-proposal/.   

  

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