Is Condo Insurance Required in Florida?

Condominium ownership in Florida offers a distinct lifestyle with unique insurance considerations. Understanding the various insurance policies and requirements is important for any condo owner or prospective buyer. This ensures adequate protection for personal assets and compliance with applicable regulations.

Distinguishing Condo Insurance Types

Condo insurance involves two primary policy types. The first is the master policy, maintained by the condominium association (HOA), which covers common elements and the building’s overall structure. This policy extends to areas such as roofs, exterior walls, shared hallways, and recreational facilities.

The second type is the individual unit owner’s policy, commonly referred to as an HO-6 policy. This policy provides coverage for the interior of a specific unit, including fixtures, appliances, and personal belongings. It fills the coverage gaps left by the master policy, which does not extend into the individual living space.

Mandatory Coverage Requirements

While Florida state law does not directly mandate individual condo owners to carry an HO-6 policy, various entities frequently require it. Florida Statutes Chapter 718 outlines the insurance obligations for condominium associations. This statute requires associations to maintain adequate property insurance for common elements and the building structure based on replacement cost, determined by an independent appraisal every 36 months.

Condominium association governing documents, such as the declaration of condominium or bylaws, frequently stipulate that unit owners must carry an HO-6 policy. These documents often require coverage for the interior “walls-in” components of the unit, which are not covered by the master policy. Mortgage lenders universally require unit owners to secure an HO-6 policy to protect their financial interest in the property.

Coverages for Unit Owners

An individual unit owner’s HO-6 policy provides various coverages. Dwelling coverage, often called “walls-in” coverage, protects the interior of the unit, including fixtures, appliances, interior walls, and flooring. This covers items and improvements that are the unit owner’s responsibility, not the association’s.

Personal property coverage protects belongings such as furniture, electronics, clothing, and other valuables from perils like theft or fire. Loss assessment coverage helps unit owners pay for special assessments levied by the HOA. These assessments can arise when the master policy’s coverage is insufficient for a large claim affecting common areas, or for master policy deductibles.

Personal liability coverage offers protection against lawsuits for bodily injury or property damage that occurs within the unit or is caused by the unit owner. If a guest is injured inside the condo, this coverage helps cover legal expenses and medical payments. An HO-6 policy also includes coverage for additional living expenses, also known as loss of use. This provides funds for temporary housing, food, and other necessary expenses if the unit becomes uninhabitable due to a covered loss.

Specific Florida Considerations

Florida’s unique climate introduces specific insurance considerations for condo owners. Hurricane deductibles are common and are percentage-based, ranging from 2% to 10% of the policy’s dwelling limits, rather than a fixed dollar amount. This deductible applies to damage caused by a storm declared a hurricane by the National Hurricane Center and is applied per calendar year.

Flood insurance is another consideration, as standard condo insurance policies (both master and HO-6) do not cover flood damage. Separate flood insurance, available through the National Flood Insurance Program (NFIP), is necessary, especially for units in designated Special Flood Hazard Areas. Mortgage lenders often require flood insurance in these areas, and Florida statutes may require associations to carry it for the entire building.

Wind mitigation features can lead to premium discounts for condo owners. These features include roof coverings, roof-to-wall connections, and opening protections like impact-resistant windows or hurricane shutters. Inspections can verify these features, potentially reducing insurance costs.

Sinkhole coverage is also a consideration in Florida, given the state’s geology. While standard homeowners policies exclude sinkhole damage, Florida law requires insurers to offer coverage for “catastrophic ground cover collapse” and to offer optional sinkhole coverage as an endorsement. This additional coverage helps protect against structural damage caused by sinkhole activity.