What changed since last year?
Insurance is not a static product. Every renewal cycle brings new variables: market conditions, claims history, regulatory changes, and even shifts in your own community’s risk profile. Boards should start by asking: What’s different this year?
- Premium increases: Florida’s property insurance market is volatile. Many associations see double-digit increases even without major claims. Ask your agent or broker to explain the specific drivers behind your renewal quote. Is it due to statewide trends, your association’s claims, or changes in coverage terms?
- Coverage changes: Insurers may adjust limits, exclusions, or endorsements from year to year. Don’t assume your policy is identical to last year’s. Review the declarations page and endorsements line by line.
- Regulatory updates: New Florida laws now require associations to maintain comprehensive property and liability insurance for common areas, and all unit owners must carry their own HO-6 policies. Make sure your renewal reflects these requirements.
- Market exits and carrier changes: Some insurers have left the Florida market or reduced their appetite for certain risks. If your carrier is non-renewing or changing terms, ask about the stability and reputation of any new insurer being proposed.
What is the property’s current replacement value?
Underinsuring your property can be just as risky as overpaying for coverage you don’t need. Boards should confirm that the policy’s replacement cost value is accurate and up to date.
- Appraisals: Florida law now requires associations to use independently prepared appraisals updated every three years to determine replacement cost. This ensures your coverage matches the true cost to rebuild after a loss.
- Inflation and construction costs: Building costs have risen sharply in recent years. Ask your agent if the policy’s replacement cost reflects current market conditions, not just last year’s numbers.
- Coverage gaps: Review what is and isn’t included in the replacement cost calculation. Does it cover code upgrades, debris removal, or other post-loss expenses?
- Partial loss scenarios: Consider how the policy would respond if only part of a building is damaged. Some policies have limitations or co-insurance penalties if the insured value is too low.
How do deductibles affect the association?
Deductibles are more than just a line item—they can have a major impact on your association’s finances after a loss.
- Deductible strategy: Boards should prepare a deductible strategy in advance. Know how much the association can realistically pay out of pocket, and whether you have reserves or a plan to assess owners if needed.
- Windstorm and named storm deductibles: In Florida, hurricane deductibles are often a percentage of the insured value, not a flat dollar amount. This can mean a much larger out-of-pocket cost than many boards expect.
- Claims vs. repairs: Standardize what triggers a claim versus what should be handled as a routine repair. Too many small claims can drive up premiums or jeopardize renewal.
- Special assessments: If a deductible is very high, the board may need to levy a special assessment after a major loss. Communicate this possibility to owners before hurricane season, not after.
Does the coverage still reflect the community’s actual risks?
Communities change. So do their risks. Boards should review whether the policy still matches the association’s real exposures.
- Common area changes: Have you added amenities, renovated buildings, or changed the use of any spaces? Make sure these are reflected in your coverage.
- Liability exposures: The master policy should include liability coverage for accidents or injuries on common property. Review limits and exclusions, especially if you have high-risk amenities like pools or playgrounds.
- Crime and fidelity coverage: Consider whether your crime and fidelity policy covers new risks, such as cyber fraud or funds transfer fraud.
- Directors and officers (D&O) insurance: Confirm that your D&O policy is current and covers the full board, including new members. This protects against claims related to board decisions.
- Flood and earthquake: Standard property policies often exclude flood and earthquake. If your community is in a risk zone, supplemental policies may be needed.
- Cyber liability: As associations handle more business online, cyber liability coverage is increasingly relevant. Ask if your policy includes this protection.
What’s not covered?
The most important part of any insurance policy is what it doesn’t cover. Boards should confirm all exclusions and limitations before renewal.
- Exclusions: Review the policy’s exclusions for perils like flood, earth movement, or wear and tear.
- Endorsements: Some risks can be added back via endorsements for an additional premium. Ask your agent what options are available.
- Prior claims: Track prior claims and how they affect renewals. Too many claims can lead to higher premiums or non-renewal.
- Unit owner responsibilities: Remind owners that the association’s master policy does not cover their personal property or interior unit improvements. Owners need their own HO-6 policy.
How should the board prepare for renewal?
A proactive, structured approach to insurance renewal can save time, money, and headaches.
- Annual policy and risk review: Schedule a formal review of all policies before renewal, not after. Document everything.
- Replacement cost and deductible check: Confirm values and deductible amounts are current and realistic.
- Claims-ready documentation: Build a folder with all documents needed to file a claim—photos, appraisals, maintenance records, and prior claim history.
- Update procedures before hurricane season: Make sure your emergency and claims procedures are up to date before storm season begins.
- Consult your insurance agent or broker: Don’t hesitate to ask for a renewal meeting or walkthrough. A good agent will help you understand changes, compare options, and avoid surprises.
- Educate owners: Use newsletters or meetings to explain insurance changes, deductible strategies, and what owners need to do on their end.
