This is just one of many articles we have read recently but they all say about the same thing.
Robin Perez fights back tears as she considers packing and leaving the
condominium she has called home for nearly a decade. Soaring insurance costs
are forcing her to think about selling.
"This has turned my life upside down," she said after learning that the new
association fee covering insurance and other costs for her Lake Villas condo
in Altamonte Springs is $5,502.
Perez and other condo owners in the 71-unit complex on Lake Orienta each
face an insurance bill averaging $2,779 -- up from $478 a year ago. That
works out to more than $200 a month per unit -- and doesn't include coverage
for a unit's interior or its contents. The premiums for those inside
policies, similar to renters insurance, are going up, too.
Florida's property-insurance crisis has hit home for the state's 22,000
condominium complexes and its 1.25 million condo owners, even those far from
the coast where hurricanes make landfall. After eight hurricanes in two
seasons, insurers in Florida are dropping coverage, raising premiums or both.
"I feel overwhelmed by this," said Perez, a 54-year-old single mother with a
16-year-old daughter. She has refinanced her mortgage to pay for this year's
higher assessment at Lake Villas, but the hefty insurance premiums are here
to stay, she noted, and that has her wondering just what to do.
"I thought I'd be here forever," she said ."Now I'm going to have to see
[about selling] to get out from under this. Insurance is what's killing me."
Condominiums have always pitched the carefree lifestyle, with swimming pools
and shared amenities, but also the pride -- and equity appreciation -- of
homeownership.
Now condo-association meetings are tense affairs, dominated by talk about
the latest rate increase and how owners might tap equity loans -- not for a
nice ocean cruise or new furniture, but to pay their insurance, said Fred
McKenna, a Lake Villas resident and member of its association's insurance
committee.
Lake Villas and many other condos statewide have been dropped by their
carriers, forcing them to turn to Citizens Property Insurance Corp., the
state-backed insurer of last resort.
Citizens, by law, must charge higher rates to avoid competing with
for-profit companies. And Citizens offers less coverage for the money.
After being "non-renewed" by Nationwide, Lake Villas cobbled together
coverage on the eve of this year's hurricane season from Citizens and three
other companies, including Lloyds of London, the famous high-risk insurer.
But no one, including the association directors who signed off on the
coverage, is happy with the higher costs.
"It's gotten much more complicated -- and expensive," said McKenna, noting
that condo boards are required by law to make sure all jointly owned
property -- the roof and exterior, for example -- is adequately insured.
That leaves the boards little or no negotiating room. Units can't be bought
or sold without the coverage.
Lake Villas' total insurance bill surged from $33,902 last year to $197,276
this year, even though the deductible for wind damage was boosted from $500
per building to an average of $26,000 per building.
That means the 14-building complex could sustain hundreds of thousands of
dollars in damage from a hurricane and still have to pay every penny of
repairs, on top of its higher premiums, said Ray Floyd, a longtime resident.
"We've been hit with this outrageous rate, and for essentially no coverage.
It's catastrophe coverage, is all it is, " said Floyd, a retiree who lives
half the year at Lake Villas and half the year in New Jersey.
"This makes it less desirable to live in Florida," he said. "At least
property taxes are deductible, but insurance is not. I'm going to have to
make a choice," he said, between staying in Florida or selling.
For coastal condos, the horror stories of high insurance bills are even more
commonplace, said Harry Charles, president of the Space Coast Condominiums
Association.
"Everybody is having a problem of one nature or another," said Charles,
whose nonprofit group is an umbrella organization for 262 associations,
mostly condo groups in Brevard County.
One condo association that he heard from, he said, faces an insurance bill
this year of $167,000 -- a more than fivefold increase from $29,000 a year
ago. Other condos are reporting fourfold increases.
The 167-unit Cocoa Beach condo that Charles lives in has been lucky so far,
he said, with a 31 percent increase in its premium this year and no change
in its private carrier.
But the deductible has been raised to about $1 million, or 4 percent of the
$25 million value for three buildings. It's a hefty bill that the condo
owners would have to split if hit by a storm.
"Every year, for years, we've had an insurance crisis, but it has gotten
worse," Charles said. Many condo owners unfairly blame Citizens, he said.
The state-created company "is just trying to do its job," he said, with
limited resources and a growing number of policies. Citizens recently became
the largest insurer in the state, absorbing clients formerly insured by
Tampa-based Poe Group, which went bankrupt, and thousands of other
policyholders who were not renewed by their private carriers.
Citizens spokesman Rocky Scott said the company is helping to keep the condo
market -- and the homeowners' market in general -- alive in Florida by
writing coverage that no one else will offer.
Though more condos are turning to Citizens, he said, the numbers "are not
excessive. We're not seeing a great flood," but a steady, and growing, stream.
"We're the only source [of insurance] along the coast," Scott said, and
increasingly in the interior of the state as well.
Rob Tallent, an agent with Peoples First Insurance, which put together Lake
Villas' new insurance package, said many condo associations throughout
Florida have been "totally shocked" to find they can get little or no
private coverage for wind damage -- even many miles inland.
"That was never a problem before, in the interior of the state," Tallent
said. "Now it is."
