Florida condo associations may have to rework their 2025 budgets at the last minute to account for higher insurance prices of as much as 15 percent following a pair of hurricanes - Helene and Milton - that hit the state’s west coast within a two-week period between late September and early October.
The hurricanes came just as Florida condo association insurance rates - which in some cases jumped from about $250,000 annually to more than $1 million - were starting to normalize after the June 24, 2021, collapse of the Champlain Towers South in the town of Surfside on the barrier island of Miami-Dade County.
“I really believe, I think, we reached a point recently where we kind of saw some stabilization in the marketplace,” said James Schumaker, an executive vice president of the Castle Group property management firm who moderated the one-hour webinar on Friday, Oct. 25, 2024. “There was a little bit - maybe not (enough) relief but it was more relief than we anticipated - on insurance rates. You probably all know what I'm going to say next.
“We had two major back-to-back powerful hurricanes hit our state, right, with Helene and Milton. Those effects are, unfortunately, likely to have another negative impact to us as homeowners and our associations.
“I hate to say it, but tough times are likely ahead.”
In the aftermath of the Surfside disaster, the Florida Legislature has taken a number of steps - prompted by insurance companies threatening to withdraw coverage in the state - to ensure that nothing like this ever happens again.
Up until now, the state’s measures were being implemented slowly but that all changes in less than 70 days when many of the measures take effect.
Beginning in January, condo associations in Florida will be required to start collecting money from unit owners to place into reserve accounts - based on the results of Structural Integrity Reserve Studies (SIRS) conducted by experts - that will be used exclusively to fix, maintain and improve the structural integrity of residential buildings that are at least three-stories tall.
People are dubbing this moment as the 2025 Florida Condo Association Financial Cliff as it is expected to result in significantly higher costs for unit owners. News reports are already chronicling condo owners selling their units at deep discounts ahead of the 2025 deadline.
On the eve of the 2025 deadline, public adjusters are currently assessing the damage of the two hurricanes but are not expected to have final numbers on the extent of the destruction until January 2025, said Jon Moller, a senior vice president with Brown & Brown Insurance in Fort Lauderdale during the webinar.
“I would try to put in as much as you could possibly put in, even for next year,” said Moller, who has a personal book of condo association business of $50 million and belongs to a team with a combined $130 million in premiums. “I have some associations going back to the drawing board and revising their budgets. And if anything, try to be as conservative as possible.
Moller added, “Just budget as much of a cushion as you can.”
(Please note a video clip and a transcript of the discussion are available behind the paywall.)
