The boundary decides the claim before anyone looks at the damage.
Where the master policy stops and the unit owner’s begins is set by Florida statute, not by your declaration alone. Get that line wrong in the first week and the association pays for repairs it never owed — or leaves owners holding damage nobody claimed.
The boundary
The first argument on almost every condominium claim is which policy owes the repair. Boards assume the declaration answers that by itself. It doesn’t. The statute requires every association to carry adequate property insurance regardless of any requirement in the declaration for certain coverage by the association. An older declaration that puts less on the master policy doesn’t lower that floor.
What the master policy must cover
- All portions of the condominium property as originally installed, or replacement of like kind and quality, in accordance with the original plans and specifications. §718.111(11)
What it must exclude — this list is the unit owner’s policy, item for item
- Floor, wall and ceiling coverings.
- Electrical fixtures, appliances, water heaters and water filters.
- Built-in cabinets and countertops.
- Window treatments, including curtains, drapes, blinds and hardware.
- Personal property within the unit. §718.111(11)
“As originally installed” means the original plans and specifications are part of the coverage grant. An enclosed lanai, tile added to a balcony, a remodeled kitchen — owner alterations generally sit outside it. That’s why the same building in the same storm produces two different answers on two units. And a board that repairs excluded items out of association funds is spending common money on something it generally didn’t owe.
What to do about it
- Read the declaration alongside the statute, not instead of it. A more generous declaration can put more on the master policy, never less.
- Pull the original plans and specifications early. They take longer to find than anyone expects.
- Get the owner alteration files out of management’s records.
- Reconstruction of association property is the association’s job, not something handed to unit owners one at a time.
Deductible and assessment
- Deductibles and damages above the limits are a common expense of the condominium. §718.111(11)
- Prepare the assessment on day one, not at the third meeting. The deductible, any code upgrade the policy won’t pay, any shortfall if the limits are stale, and professional fees.
- Owners handle that number far better when it arrives once, early, with the reasoning attached.
Tell the owners about their loss assessment coverage
- A unit owner’s residential policy issued or renewed in Florida on or after July 1, 2010 must include at least $2,000 of property loss assessment coverage, with a deductible of no more than $250. §627.714
- That $2,000 is a floor, not a limit. Owners can carry more, and on a building with a large named-storm deductible they should.
- The limit that applies is the one in force the day before the occurrence. Buying more after the storm doesn’t help.
- Notice runs to the later of one year after the date of loss or 90 days after the board votes to levy, and never past three years. §627.70132
- Tell the owners the day the board votes, not in the next quarterly newsletter.
Records, assembled before you’re asked for it
- Work orders, vendor invoices, roof repairs and leak logs, seven years back, plus the board minutes that discuss the building.
- The full master policy with every endorsement.
- Separately, the flood policy, equipment breakdown, directors and officers, and the fidelity bond.
- The last independent insurance appraisal. Replacement cost limits are expected to be supported by one and updated at least every 36 months.
- Original plans and specifications, and the unit owner alteration files.
- The milestone inspection and the structural integrity reserve study, if the building has them.
An association that produces this quickly and completely is in a different position from one that produces it in pieces over four months. Notify your property management company as soon as possible to start the process, while nobody is under pressure.
The building safety laws, milestone inspections and reserve studies, why they are important
- A building three or more habitable stories under condominium or cooperative ownership needs a milestone inspection by December 31 of the year it reaches 30 years of age, and every ten years after. §553.899
- A local agency can move that to 25 years where conditions such as proximity to salt water warrant it. §553.899
- The same buildings need a structural integrity reserve study at least every ten years, and reserves for those items generally can’t be waived. §718.112(2)(g)
- Where the milestone report describes deterioration in the same areas the claim describes damage, the two documents get read together.
- It cuts the other way too, and that’s the part boards miss. A milestone report completed before the storm is the best evidence of what the building’s condition actually was beforehand. Used properly it doesn’t weaken the claim. It proves it.
For the board: one voice to the carrier, and a record the membership can read
- Owners need three things in writing, early. What the master policy covers, what their own policy covers, and that an assessment may be coming.
- Unit owners are entitled to the association’s official records, and the current insurance policies are official records, available within 10 working days of a written request. §718.111(12)
What to look for in your policy
- Your named-storm deductible, and whether it’s a percentage of the building limit or of the full schedule of values.
- Your all-other-perils deductible, and whether it applies per building or per occurrence.
- The schedule of values, and when the limits were last supported by an independent appraisal.
- Coinsurance, and the figure the penalty is measured against.
- Ordinance and law coverage, if you have it and its limit. On an older building this is usually the largest number nobody planned for.
- Whether the policy is written replacement cost or actual cash value on the policy.
- Equipment breakdown, and whether chillers, elevators and the fire pump are scheduled.
- The separate flood policy, its limits, and how they line up against the ground floor and the parking levels.
- Any sublimits. Debris removal, pool and deck equipment, signs, trees and landscaping, docks and seawalls.
- The vacancy provision, if a building or a wing is out of service.
- Yearly renewals often change coverages in previous policies. Review all endorsement changes yearly.
After an association loss: Dos and Don’ts
Dos
- Notice the claim first and supplement later. Don’t wait for every owner to report before the association’s own claim is noticed.
- Tell the owners the day the board votes to levy. There’s a 90-day window that runs from that vote.
- Pull the original plans and specifications and the owner alteration files early.
- Notify your property management company early and start assembling seven years of repair and maintenance records.
- Document delay as it happens. Permits, engineer reports, long-lead materials like windows and elevators, code upgrades, contractor capacity.
- Ask for advances as items are agreed. The roof doesn’t have to wait on an argument about balconies.
Don’ts
- Don’t just read the declaration and not the statute. The statute sets the floor. A declaration can put more on the master policy than the statute requires, never less.
- Don’t repair excluded items out of association funds. Coverings, fixtures, appliances, cabinets, countertops and window treatments are generally the owner’s.
- Don’t let the association’s reconstruction be handed to unit owners one at a time.
- Don’t assume the owners know about their loss assessment coverage. Most of them don’t.
This isn’t everything. Your policy carries conditions and duties that apply after a loss, and they’re yours to meet whether or not they appear here. Read your own policy in full. If something in it doesn’t make sense, call me — it’s a twenty-minute phone call about the loss, whether or not you hire me.
These are the ones specific to this kind of loss. Select the link for the Dos and Don’ts that apply to every claim.
The call that matters
If your association has had a loss, call or email me. It’s a twenty-minute phone call about the loss, and I’ll tell you what the assessment is likely to look like and what to have assembled before the carrier asks for it.
You stay in control of your claim. That’s the whole point.