rates for condos may fall
to change in Citizens rules
Article Courtesy of The Sun Sentinel
Published August 18, 2006
associations statewide could see an end to triple-digit increases to their
Citizens Property Insurance Corp. premiums -- some could even see refunds --
because of a change in how the associations' policies are handled.
Rather than grouping condo buildings together on one policy, Citizens' board
decided last week the company will treat the buildings separately. While it
may sound like a small move, the change could save associations thousands of
dollars on their insurance premiums. And that means condo owners could save,
too, but it depends on their associations.
Citizens will still apply stricter criteria to individual condo buildings
that cost $10 million or more to replace. That means a beachfront high-rise
condo in Boca Raton with an insurance policy of more than $10 million won't
be treated the same as a retirement condo community with a $10 million
policy in Pembroke Pines.
When Citizens' board decided earlier this year to enact tougher standards on
condo associations and group an association's buildings on one policy, it
meant substantially higher premiums for many associations. "It was such
a sticker shock to most of the associations," said Tom Lynch, president
of Plastridge Insurance in Delray Beach, whose firm handles insurance
policies for a number of condo associations. " ... What [Citizens is]
proposing is a good thing for the consumer."
Century Village, for example, had seen its insurance premiums increase as
much as 300 percent from what it had paid to the now-defunct Poe Financial
Group because Citizens put the buildings on one policy, Lynch said.
Lynch expects to see a 20- to 30-percent reduction in rates because of the
change, though premiums will still be higher than what the associations paid
Citizens' change will apply retroactively to any policies issued on or after
May 15, which is when the company first issued condo association policies
using the stricter standards. Citizens will now re-evaluate the association
policies and their premiums, and will refund the difference to about 2,000
The company will issue refunds in 60 to 90 days, company spokesman Rocky
Scott said. Citizens insures 1,124 associations in Broward and 768
associations in Palm Beach County. It insures 7,562 associations statewide.
Major price increases to condo associations prompted the board to reverse
its previous decision, Scott said.
Some senior citizens wept because of how much more they would have to pay to
their associations to cover rising insurance costs, said Paul Mack,
president of The Mack Insurance Group in Boca Raton. Residents in the
Whisper Walk community west of Boca Raton faced one-time assessments as high
as $1,600 because of insurance, Mack said.
"This is going to provide them a big relief," Mack said.
Condo association leaders were glad to hear they could see refunds, but
criticized Citizens for making changes in the first place.
At Century Village in West Palm Beach, condo unit owners were already
assessed roughly $200 each to pay for insurance, said George Loewenstein,
president of the United Civic Association, the umbrella organization for
condo groups at Century Village.
The associations already financed their insurance premiums, and will pay
interest on what they borrowed, he said.
"Citizens really didn't think this thing through," Loewenstein
said. "It's really hard to live with policies that keep changing."
He's not sure how much the associations, or their owners, will get back from
Marilyn Silverman, president of the Emerald Hills Country Club Apartment
Condo Association in Hollywood, said her association had to spread out a
$141,000 insurance price increase among condo owners in six buildings. When
the association gets money back, she said she plans to divide it among the
owners based on the size of the assessment they paid in the first place.
"Hopefully, if we have a very calm season ... maybe the insurance will
stay like this for next year," Silverman said.