On Eve Of 2025 Condo Cliff, Florida Associations Now Face Insurance Rate Spike
In this latest issue of the Miami Condo Market Intelligence Report™, we examine how cash-strapped Florida condo associations could now have to deal with increased insurance rates next year.
Volume 2024, Issue 39 (Subscribe here)
This week’s Miami Condo Market Intelligence Report™ newsletter examines how cash-strapped condo associations - which are already budgeting to avoid falling victim to Florida’s looming 2025 Condo Association Financial Cliff - are now being told to prepare for additional costs from a projected last minute spike in insurance rates next year.
A condo association insurance expert said at a webinar this week that the pair of hurricanes - Helene and Milton - that hit the state’s west coast two weeks apart from late September to early October will have a material effect on prices in 2025.
This is an abrupt about-face from what condo associations were planning on in Florida.
Prior to the landfalls of the pair of hurricanes, Florida condo associations were being advised to expect minimal rate increases - and in some cases even five percent decreases - next year.
Now, the insurance industry - which is awaiting the final hurricane damage assessments from public adjusters - is discussing rate increases of as much as 10 percent from private insurers and 15 percent from Florida’s insurer of last resort, Citizens Property Insurance Corp.
What does this mean in real dollars for condo unit owners in Florida?
A recent report found that the average monthly maintenance fee for a Miami-Dade condo tower with at least seven floors is $1.08 per square foot for projects with fewer than 300 units and $1.20 per square foot for structures with more than 300 units.
Based on this report, Miami-Dade County condo owners spent about 26 cents per square foot monthly to insure towers with less than 300 units and about 23 cents per square foot monthly to insure highrises with at least 300 units, according to the report.
In a worst-case scenario, a 15-percent increase in condo association insurance rates would potentially drive up maintenance fees by nearly four cents per square foot monthly for towers with less than 300 units and more than three cents for projects with more than 300 units.
For a 1,000-square-foot condo in Miami-Dade County, owners could, theoretically, be charged an extra $39 monthly - or about $468 annually - for towers with less than 300 units and an additional $34 monthly - or about $408 annually - for projects with more than 300 units.
In addition to the condo association insurance that is paid by management using monthly maintenance fees, condo owners are also required to insure their own individuals units.
A new report showed that the average condo unit insurance premium in Miami-Dade County in July 2024 was nearly $250 monthly - or about $2,987 annually - plus any deductibles if - and when - a claim is filed.
Given that the statistics were compiled at the start of the 2024 Atlantic hurricane season, it is unclear how much insurance rates for individual condo units could increase in 2025.
If the 15-percent projected increase were to be applied, condo owners could be paying an extra $37 monthly or about $448 annually to insure individual units.
It is worth noting that condo association insurance is required by conventional lenders that are considering providing financing for individual purchases in a project.
If a condo association does not have insurance, cash buyers are likely to be the only prospective purchasers in a project.
Typically, cash buyers tend to purchase real estate at deep discounts off of the market value.
In the aftermath of the June 24, 2021, collapse of the Champlain Towers South in the town of Surfside on the barrier island of Miami-Dade County, 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 a key funding requirement takes 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.
It is a lot of information but we are confident our reports will assist you to better understand current market conditions in South Florida.
It is worth noting that we are sharing a portion of our research for free with subscribers to our newsletter and readers of CondoVultures.com.
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If you are seeking information on condo resales in South Florida, please visit CondoVulturesRealty.com or call the office at 305.865.5859.
— Peter Zalewski, Founder of the Miami Condo Market Investing Club™
Story 1
Florida Condo Associations Face Up To 15% Insurance Rate Hikes In 2025
A four-person webinar hosted by Castle Group property management discussed what Hurricanes Helene and Milton means for Florida condo associations for the next two years.
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Miami-Dade Condo Owner Insurance Premiums Ranked 2nd Most Expensive In Florida
Broward and Palm Beach counties both ranked in the top 10 of the most expensive condo insurance premiums in Florida.
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Is Florida's Property Insurance Market Stable?
This is an AI-generated narration of the latest Florida Property Insurance Stability Report authored by Michael Yaworsky, the state's Insurance Commissioner.
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Florida Condo Association Financial Cliff Seminar For VIP Investors Set For Dec. 3
The four-hour seminar for VIP investors will be hosted by Miami condo expert Peter Zalewski less than 30 days before the 2025 deadline takes effect.
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CBS News: Miami Condo Market Faces 'Risk Of Collapse' In 2025
CBSNews.com in Miami interviewed condo expert Peter Zalewski of the Miami Condo Market Investing Club™ for the story.
This information is believed to be accurate and complete but cannot be guaranteed or warranted.
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