Florida lawmakers passed new laws to reform insurance and condominiums

Florida lawmakers passed new laws to reform insurance and condominiums

The Florida Legislature has enacted a number of bills to address problems in the insurance market, including condominium insurance.

The meeting was held in Tallahassee, the state capital. The goal was to deal with rising insurance expenditures and solve problems with condominium-type home insurance. Condominium insurance requires special attention due to the events that took place last June in Surfside. 98 people died when a 12-storey building collapsed.

Generally, two lists of reforms were passed: Senate Bill 2D and Senate Bill 4D. The first one is dedicated to the general reforms of the insurance market and is supported by the association of realtors, Florida Realtors. The second one focuses on reforms in condo insurance.

The first bill is designed to combat such issues as arbitrary and frivolously motivated legal actions, roofing fraud, and issues with reinsurance when the insurance contract is reviewed with serious claims. Also, the reform goal is to simplify home insurance in case of hurricanes, which occur regularly in the state.

The following are some of the law reforms:

  • $2 billion will be available to help the insured (policyholders) with reinsurance. The new program is called "Reinsurance to Assist policyholders" or RAP.
  • The $150 million allocation and additional grants will be created in order to be spent on inspections to mitigate the effects of hurricanes, strengthening buildings and making them hurricane-proof.
  • Insurance companies have no right to refuse to issue and renew roof insurance for buildings older than 15 years solely on the basis of the age of the building.
  • Roof insurance contracts should contain clear language for the consumer that the insured clients is responsible for the franchise, and the counterparty commits fraud if it makes unmotivated manipulations with the franchise conditions or does it under various false pretenses.
  • Insurance companies may offer conditions at rates reduced to 2% of the total amount of insurance for contracts including a roof deductible, or up to 50% of the roof replacement amount. In the event of natural disasters, including hurricanes, the roof deductible is invalid.
  • Several changes are applied to the conditions and amounts of remuneration for lawyers who take part in drawing up an insurance contract.
  • Any lawsuits by insurers are now required to have a clear indication of where exactly the policyholder violated the contract terms.

The second bill (4D) focuses on improving the process of inspection of high-rise residential buildings, more frequent safety standard certification and recertification, imposing obligations on the building management organization to create reserve funds for renovation of the property.

Among the changes are the following:

  • A government obligation to inspect a condominium or residential complex after 30 years since initial occupancy if the building is higher than 3 storeys, and 25 years after initial occupancy if the property is located less than 5 kilometers from the shore.
  • After the initial inspection, it is necessary to inspect the facility every 10 years.
  • If the initial inspection reveals any issues with the building's structure, a close regular inspection is required.
  • From 2024 onwards, condominium associations are required to inspect the building's structural integrity margin every 10 years. It means they need to know how successful and for how long the building can continue to experience the current load and whether any measures are needed to repair and renovate the facility.

Both bills came into force right after Ron DeSantis, Governor of Florida, signed them.

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