Recent insurance rule leaves out condo associations

Condo associations that renew policies before May 1 will still see a rate hike.

Article Courtesy of The Miami Herald

Published February 22, 2007

For 4,387 condominium associations covered by the state-run insurance company in South Florida, the massive insurance reform bill passed last month won't provide much relief.

The law rolled homeowners rates on Citizens Property Insurance policies back to their Dec. 31 level and eliminated an increase set for new policies and renewals after Jan. 1. For policyholders who had started paying the higher rates, refund checks will be coming their way.

But there's no such deal for condominium associations.

The state-run insurer had put in place a new set of rates, albeit sharply higher ones, last May. These are the rates frozen by the new law. Citizens will keep these condo association rates through this year because the new law also forbids the insurer from raising rates this year.

But here's the rub.

Condo associations that will be renewing their Citizens policies through May 1 will be hit with those higher rates. The average statewide increase was 25 percent.

Citizens' spokesman Rocky Scott said coastal properties, especially in South Florida, will see the bigger increases.

Individual condo owners who buy coverage for their units will see the rate rollback because these are considered residential policies.


Jan Bergemann, president of Cyber Citizens For Justice, a condo association advocacy group, said condo owners are upset about the high premiums.

An association's insurance policy generally covers buildings and common areas in a condominium project. The premiums are split among the unit owners.

''But at least the special session stopped the bleeding,'' Bergemann said.

He's hopeful that as Citizens is allowed to become a more competitive insurance operation, it will be able to spread its risk over a wider pool and lower rates.

The new law allows Citizens to write commercial insurance policies beyond the state's designated wind-pool area. It expects to begin writing multiperil homeowners policies once its business plan is approved by state regulators.

Citizens has 8,964 condo association policies on its books, representing $31.2 billion in exposure. The number of these policies has been growing rapidly for Citizens. It took in 740 new condo policies in January, with exposure of $6.3 billion.