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Article
Courtesy of The Capitolist
By Caden DeLisa
Published December 16, 2023
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A pair of bipartisan lawmakers have introduced a bill
aimed at creating a Condominium Windstorm Pilot Program to offer new
insurance options for condominium associations using Citizens Property
Insurance Corp.
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The measures posit changing the insurance model from
covering the replacement cost of condo roofs to their actual cash value,
which includes depreciation.
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The shift in valuation could lead to lower insurance
premiums and boost resale values, benefiting especially older condos.
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Citizens Property Insurance Corp. has not yet taken a
position on the proposed bills.
In a bipartisan move, Florida lawmakers have introduced
legislation that seeks to establish a Condominium Windstorm Pilot Program,
which would provide a new insurance option for condominium associations.
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The bills, Senate
Bill 802 and House Bill 655, filed by Republican
Sen. Ana Maria Rodriguez and Democratic Rep. Hillary Cassel
in their respective chamber, propose allowing condominiums
that use Citizens Property Insurance to insure their roofs
based on actual cash value instead of the replacement cost.
The shifted model, if adopted, is expected to lower
insurance premiums and enhance resale values for condos,
particularly older structures facing financial strains due
to recently implemented safety regulations.
“Florida has taken tremendous steps in the past few years to
increase condominium safety and association financial
health,” said Cassel. “But, we owe it to our residents to
find common sense solutions to help ease financial burdens.
This bill is one of those solutions. I am extremely proud to
lead a bipartisan effort to reduce insurance premiums in
Florida.” |
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Citizens Property Insurance currently uses a Replacement
Cost Value (RCV) approach for assessing and replacing damaged condominium
rooftops. This method calculates insurance premiums based on the current
cost of replacing the rooftop without considering depreciation. However, a
shift to an Actual Cash Value (ACV) would result in the condition and
depreciation of the rooftop to be taken into account when assessing it for
damage and replacement.
This change, according to lawmakers, could lead to lower costs for
policyholders, offering them more options and potentially reducing windstorm
insurance premiums. Under the bill, to participate in the pilot program,
condominium associations must show proof of fully funded roof reserves and
disclose the selection to all unit owners.
“South Florida’s condominium associations are plagued with high premiums,”
said Rodriguez. “With this bill, we will open up an avenue for condominiums
to reduce their cost and increase consumer choice in the marketplace.”
Upon outreach, representatives for Citizens Property Insurance Corp.
informed The Capitolist that it had not yet taken a stance on the bills.
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