Condo Insurance Surge

With the end of the year, fast-approaching condo associations throughout South Florida are tackling budgeting issues for 2023. In addition to increasing maintenance fees resulting from recent condo legislation requiring more frequent inspections and forced budgeting for upcoming work, condos are starting to realize that they are facing massive insurance hikes as well.

As COVID swept through the US, many buyers moved to FL to flee local states, take advantage of the work-from-home environment, enjoy sunny weather, and escape local state taxes. However, with the fear of missing out on buying due to the competitive market bidding wars, many buyers failed to account for all increases in future holding costs. The cost of insurance increases was frequently overlooked when buyers calculated the cost of home ownership.

Many single-family homeowners face increases of over 30%, while some condo associations are shocked to see premiums increase by 100%. This is due to the large turnover in properties, massive sale price increases, and reduction of insurance companies in South Florida.

As homes and building value appraisals drastically increase, homeowners and condominium associates are forced to increase insurance coverage to properly insure based on these new values.

What makes things worse is that associations have not seen drastic increases like this in the past and May be under budget for 2023 maintenance which may result in them having to place special assessments to cover the gap in their insurance budget.

What can you do? Unfortunately, not much as self-insurance isn’t an option for most. However, when voting on future budgets, it would be prudent not to be under budget to decrease the odds of a special assessment.