Article Courtesy of the Sun Sentinel

By CHRIS GUANCHE

Published August 1, 2007 

Insurance and property-tax reform were the subjects of special sessions of the state Legislature, and they are still major issues for Broward County condominium owners.

The first part of the two-pronged property-tax reform plan offers homeowners an average savings of $174; however, voters must approve more substantial savings during January's primary. County condo owners are feeling the pinch even after the recent property-tax special session, said Pio Ieraci, president of the Galt Mile Community Association. Ieraci describes the tax cut passed by the Legislature as all smoke and mirrors.

"[The Legislature] had a real opportunity to dramatically change the tax structure in the state and really make substantial inroads into assisting the people of this state to remain here and be able to live here in some reasonable way," Ieraci said.

The Galt Mile Community Association has 26 member buildings, with about 6,500 condo units. The buildings have been unable to buy windstorm insurance from any provider other than Citizens Property Insurance Corp., the state-backed insurer of last resort.

"The rates have escalated in the last couple of years tenfold in some buildings," Ieraci said.

Insurance costs compose more than 40 percent of the budgets of some buildings. Yearly windstorm premiums on an older building with about 200 units valued at $24 million can run from $350,000 to $400,000, Ieraci said. The association is looking to create windstorm trust to combat the rising costs.

A lack of information is an issue for condo owners trying to find insurance, said Jan Bergemann, president of Cyber Citizens for Justice Inc., an Internet-based volunteer group that deals with condo issues.

That may change with a new state Web site ( www.shopandcomparerates.com) that offers insurance-rate comparisons by county for various providers. The rates are averages, and the insurance providers may not be writing new policies in all counties. In Broward County, rates range from the low end at $1,731 from Security First to $7,545 on the high end from State Farm. Citizens falls in the middle with a rate of $3,032.

One possible solution is condo associations banding together to form windstorm self-insurance pools. Three associations are required to form a pool, but Bergemann cautions against joining a pool too quickly.

"Three condos can make a pool, but what if two go bust? Who pays for the damages?" Bergemann said.

Bergemann said another viable solution would be to further expand the areas that Citizens can write policies for to help increase the amount of funds available to the company.

"Insurance runs on the principle that people pay into a big pot," Bergemann said. "The more that's paid into the pot, the less the risk per person."