October 14, 2019
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       Florida Senate - 2009                                     SB 714
       By Senator Jones
       13-00853-09                                            2009714__
    1                        A bill to be entitled                      
    2         An act relating to condominium insurance; amending s.
    3         718.111, F.S.; requiring that adequate property
    4         insurance be based upon the replacement cost of the
    5         property to be insured as determined by an independent
    6         appraisal or update of a prior appraisal; requiring
    7         that such replacement cost be determined at least once
    8         within a specified period; providing means by which an
    9         association may provide adequate property insurance;
   10         authorizing an association to consider deductibles
   11         when determining an adequate amount of property
   12         insurance; providing that failure to maintain adequate
   13         property insurance constitutes a breach of fiduciary
   14         duty by the members of the board of directors of an
   15         association; revising the procedures for the board to
   16         establish the amount of deductibles; requiring that an
   17         association controlled by unit owners operating as a
   18         residential condominium use its best efforts to obtain
   19         and maintain adequate property insurance to protect
   20         the association and certain property; requiring that
   21         every property insurance policy issued or renewed on
   22         or after a specified date provide certain coverage;
   23         excluding certain items from such requirement;
   24         providing that excluded items and any insurance
   25         thereupon are the responsibility of the unit owner;
   26         requiring that condominium unit owner's policies
   27         issued after a specified date conform to certain
   28         provisions of state law; deleting provisions relating
   29         to certain hazard and casualty insurance policies;
   30         conforming provisions to changes made by the act;
   31         creating s. 627.714, F.S.; requiring that unit owner
   32         policies issued or renewed on or after a specified
   33         date include at least a minimum amount of loss
   34         assessment coverage; requiring that every property
   35         insurance policy issued or renewed on or after a
   36         specified date to an individual unit owner contain a
   37         certain provision; providing an effective date.
   39  Be It Enacted by the Legislature of the State of Florida:
   41         Section 1. Paragraphs (a), (b), (c), (d), (f), (g), and (j)
   42  of subsection (11) of section 718.111, Florida Statutes, are
   43  amended to read:
   44         718.111 The association.—
   45         (11) INSURANCE.—In order to protect the safety, health, and
   46  welfare of the people of the State of Florida and to ensure
   47  consistency in the provision of insurance coverage to
   48  condominiums and their unit owners, this subsection applies to
   49  every residential condominium in the state, regardless of the
   50  date of its declaration of condominium. It is the intent of the
   51  Legislature to encourage lower or stable insurance premiums for
   52  associations described in this subsection.
   53         (a) Adequate property hazard insurance, regardless of any
   54  requirement in the declaration of condominium for coverage by
   55  the association for full insurable value, replacement cost, or
   56  similar coverage, shall be based upon the replacement cost of
   57  the property to be insured as determined by an independent
   58  insurance appraisal or update of a prior appraisal. The
   59  replacement cost full insurable value shall be determined at
   60  least once every 36 months.
   61         1. An association or group of associations may provide
   62  adequate property hazard insurance through a self-insurance fund
   63  that complies with the requirements of ss. 624.460-624.488.
   64         2. The association may also provide adequate property
   65  hazard insurance coverage for a group of no fewer than three
   66  communities created and operating under this chapter, chapter
   67  719, chapter 720, or chapter 721 by obtaining and maintaining
   68  for such communities insurance coverage sufficient to cover an
   69  amount equal to the probable maximum loss for the communities
   70  for a 250-year windstorm event. Such probable maximum loss must
   71  be determined through the use of a competent model that has been
   72  accepted by the Florida Commission on Hurricane Loss Projection
   73  Methodology. No policy or program providing such coverage shall
   74  be issued or renewed after July 1, 2008, unless it has been
   75  reviewed and approved by the Office of Insurance Regulation. The
   76  review and approval shall include approval of the policy and
   77  related forms pursuant to ss. 627.410 and 627.411, approval of
   78  the rates pursuant to s. 627.062, a determination that the loss
   79  model approved by the commission was accurately and
   80  appropriately applied to the insured structures to determine the
   81  250-year probable maximum loss, and a determination that
   82  complete and accurate disclosure of all material provisions is
   83  provided to condominium unit owners prior to execution of the
   84  agreement by a condominium association.
   85         3. When determining the adequate amount of property hazard
   86  insurance coverage, the association may consider deductibles as
   87  determined by this subsection.
   88         (b) If an association is a developer-controlled
   89  association, the association shall exercise its best efforts to
   90  obtain and maintain insurance as described in paragraph (a).
   91  Failure to obtain and maintain adequate property hazard
   92  insurance during any period of developer control constitutes a
   93  breach of fiduciary responsibility by the developer-appointed
   94  members of the board of directors of the association, unless the
   95  members can show that despite such failure, they have made their
   96  best efforts to maintain the required coverage.
   97         (c) Policies may include deductibles as determined by the
   98  board.
   99         1. The deductibles shall be consistent with industry
  100  standards and prevailing practice for communities of similar
  101  size and age, and having similar construction and facilities in
  102  the locale where the condominium property is situated.
  103         2. The deductibles may be based upon available funds,
  104  including reserve accounts, or predetermined assessment
  105  authority at the time the insurance is obtained.
  106         3. The board shall establish the amount of deductibles
  107  based upon the level of available funds and predetermined
  108  assessment authority at a meeting of the board. Such meeting
  109  shall be open to all unit owners in the manner set forth in s.
  110  718.112(2)(e). The notice of such meeting must state the
  111  proposed deductible and the available funds and the assessment
  112  authority relied upon by the board and estimate any potential
  113  assessment amount against each unit, if any. The meeting
  114  described in this paragraph may be held in conjunction with a
  115  meeting to consider the proposed budget or an amendment thereto.
  116         (d) An association controlled by unit owners operating as a
  117  residential condominium shall use its best efforts to obtain and
  118  maintain adequate property insurance to protect the association,
  119  the association property, the common elements, and the
  120  condominium property that is required to be insured by the
  121  association pursuant to this subsection.
  122         (f) Every property hazard insurance policy issued or
  123  renewed on or after January 1, 2009, for the purpose of
  124  protecting the condominium shall provide primary coverage for:
  125         1. All portions of the condominium property as originally
  126  installed or replacement of like kind and quality, in accordance
  127  with the original plans and specifications.
  128         2. All alterations or additions made to the condominium
  129  property or association property pursuant to s. 718.113(2).
  130         3. The coverage shall exclude all personal property within
  131  the unit or limited common elements, and floor, wall, and
  132  ceiling coverings, electrical fixtures, appliances, water
  133  heaters, water filters, built-in cabinets and countertops, and
  134  window treatments, including curtains, drapes, blinds, hardware,
  135  and similar window treatment components, or replacements of any
  136  of the foregoing. Such property and any insurance thereupon
  137  shall be the responsibility of the unit owner.
  138         (g) A condominium unit owner's policy issued after October
  139  1, 2009, shall conform to the requirements of s. 627.714. Every
  140  hazard insurance policy issued or renewed on or after January 1,
  141  2009, to an individual unit owner must contain a provision
  142  stating that the coverage afforded by such policy is excess
  143  coverage over the amount recoverable under any other policy
  144  covering the same property. Such policies must include special
  145  assessment coverage of no less than $2,000 per occurrence. An
  146  insurance policy issued to an individual unit owner providing
  147  such coverage does not provide rights of subrogation against the
  148  condominium association operating the condominium in which such
  149  individual's unit is located.
  150         1.All improvements or additions to the condominium
  151  property that benefit fewer than all unit owners shall be
  152  insured by the unit owner or owners having the use thereof, or
  153  may be insured by the association at the cost and expense of the
  154  unit owners having the use thereof.
  155         2.The association shall require each owner to provide
  156  evidence of a currently effective policy of hazard and liability
  157  insurance upon request, but not more than once per year. Upon
  158  the failure of an owner to provide a certificate of insurance
  159  issued by an insurer approved to write such insurance in this
  160  state within 30 days after the date on which a written request
  161  is delivered, the association may purchase a policy of insurance
  162  on behalf of an owner. The cost of such a policy, together with
  163  reconstruction costs undertaken by the association but which are
  164  the responsibility of the unit owner, may be collected in the
  165  manner provided for the collection of assessments in s. 718.116.
  166         1.3. All reconstruction work after a casualty loss shall be
  167  undertaken by the association except as otherwise authorized in
  168  this section. A unit owner may undertake reconstruction work on
  169  portions of the unit with the prior written consent of the board
  170  of administration. However, such work may be conditioned upon
  171  the approval of the repair methods, the qualifications of the
  172  proposed contractor, or the contract that is used for that
  173  purpose. A unit owner shall obtain all required governmental
  174  permits and approvals prior to commencing reconstruction.
  175         2.4. Unit owners are responsible for the cost of
  176  reconstruction of any portions of the condominium property for
  177  which the unit owner is required to carry casualty insurance,
  178  and any such reconstruction work undertaken by the association
  179  shall be chargeable to the unit owner and enforceable as an
  180  assessment pursuant to s. 718.116. The association must be an
  181  additional named insured and loss payee on all casualty
  182  insurance policies issued to unit owners in the condominium
  183  operated by the association.
  184         3.5. A multicondominium association may elect, by a
  185  majority vote of the collective members of the condominiums
  186  operated by the association, to operate such condominiums as a
  187  single condominium for purposes of insurance matters, including,
  188  but not limited to, the purchase of the property hazard
  189  insurance required by this section and the apportionment of
  190  deductibles and damages in excess of coverage. The election to
  191  aggregate the treatment of insurance premiums, deductibles, and
  192  excess damages constitutes an amendment to the declaration of
  193  all condominiums operated by the association, and the costs of
  194  insurance shall be stated in the association budget. The
  195  amendments shall be recorded as required by s. 718.110.
  196         (j) Any portion of the condominium property required to be
  197  insured by the association against property casualty loss
  198  pursuant to paragraph (f) which is damaged by casualty shall be
  199  reconstructed, repaired, or replaced as necessary by the
  200  association as a common expense. All property hazard insurance
  201  deductibles, uninsured losses, and other damages in excess of
  202  property hazard insurance coverage under the property hazard
  203  insurance policies maintained by the association are a common
  204  expense of the condominium, except that:
  205         1. A unit owner is responsible for the costs of repair or
  206  replacement of any portion of the condominium property not paid
  207  by insurance proceeds, if such damage is caused by intentional
  208  conduct, negligence, or failure to comply with the terms of the
  209  declaration or the rules of the association by a unit owner, the
  210  members of his or her family, unit occupants, tenants, guests,
  211  or invitees, without compromise of the subrogation rights of any
  212  insurer as set forth in paragraph (g).
  213         2. The provisions of subparagraph 1. regarding the
  214  financial responsibility of a unit owner for the costs of
  215  repairing or replacing other portions of the condominium
  216  property also apply to the costs of repair or replacement of
  217  personal property of other unit owners or the association, as
  218  well as other property, whether real or personal, which the unit
  219  owners are required to insure under paragraph (g).
  220         3. To the extent the cost of repair or reconstruction for
  221  which the unit owner is responsible under this paragraph is
  222  reimbursed to the association by insurance proceeds, and, to the
  223  extent the association has collected the cost of such repair or
  224  reconstruction from the unit owner, the association shall
  225  reimburse the unit owner without the waiver of any rights of
  226  subrogation.
  227         4. The association is not obligated to pay for repair or
  228  reconstruction or repairs of property casualty losses as a
  229  common expense if the property casualty losses were known or
  230  should have been known to a unit owner and were not reported to
  231  the association until after the insurance claim of the
  232  association for that property casualty was settled or resolved
  233  with finality, or denied on the basis that it was untimely
  234  filed.
  235         Section 2. Section 627.714, Florida Statutes, is created to
  236  read:
  237         627.714Condominium unit owner coverage; loss assessment
  238  coverage required.—For policies issued or renewed on or after
  239  October 1, 2009, coverage under a residential condominium unit
  240  owner's policy shall include loss assessment coverage of at
  241  least $2,000 after any applicable deductible due under the
  242  condominium unit owner's policy. Every property insurance policy
  243  issued or renewed on or after January 1, 2010, to an individual
  244  unit owner must contain a provision stating that the coverage
  245  afforded by such policy is excess coverage over the amount
  246  recoverable under any other policy covering the same property.
  247         Section 3. This act shall take effect July 1, 2009.

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