For account questions or submissions, reach you to your current Amwins broker or Melanie Alberico, Client Relationship Manager, at 312.601.9388 or melanie.alberico@amwins.com.
Our insight on emerging issues and trends in the property marketplace gives you an advantage with your clients and helps you prepare them for what lies ahead.
Nearly three years ago, we all witnessed the partial collapse of the Champlain Towers South building in Surfside, Florida. Ninety-eight residents were killed and hundreds left homeless. The investigation into the cause of the collapse is ongoing, with the National Institute of Standards and Technology (NIST) expecting their technical work to be substantially completed in late June 2024 and their report with findings and recommendations to come late June 2025.
Impacts to the real estate market across Florida were immediate. The Florida Legislature drafted many bills suggesting changes to the Florida Condominium Act, ultimately passing Florida Senate Bill 4-D in May 2022 and quickly following it up with Florida Senate Bill 154 in June 2023.
While some requirements of these bills took place immediately, others are set to go into effect later this year.
This bill created safety requirements for condos and co-ops three or more stories tall. Specifically, Florida SB 4-D requires these condos or co-ops to complete milestone safety and structural inspections at 30 years of age (and every 10 years thereafter) or buildings 25 years of age (and every 10 years thereafter) if the building is located within three miles of the coastline.
Additional requirements include updates to the Florida Building Code (FBC) which now requires that when 25% or more of roof section, system, etc. is replaced or repaired, only the portion of the roof undergoing work must be constructed in accordance with FBC. Prior to this revision, FBC required no more than 25% of the roof be repaired, replaced, etc. unless the entire existing roofing system or section confirmed to FBC code.
Updates to the funding of reserves for continued maintenance and repair of condominium and co-op buildings have perhaps been the biggest and most financially impactful changes implemented thus far.
While these changes were made to improve prior law, the end result is that condo ownership is more expensive.
As SB 4-D went into effect, the challenges of implementing the new requirements became clear. A few key issues stood out:
Passed in June 2023, this follow-up or “Glitch Bill” as it is known, SB 154 aimed to clarify SB 4-D by providing the following solutions:
In general, SB 154 means that milestone inspections, SIRS and increased reserve requirements are here to stay. However, the implications of this more recent legislation remain to be seen. We will continue to evaluate the market and keep you apprised of challenges and innovative solutions.
While both bills support a continued emphasis on safety and stability for COAs and co-ops, the cost of owning these properties remains a pressure point. And, as long as reserves must be fully funded – some estimates show that only 25% of condos are fully funded at this time – we believe wind loss limits in this space will be seen as a way to cut costs on existing insurance programs.
It’s important to note, however, that full limits are still required under Statute 718. Despite many insureds placing loss limit programs on wind, full limits must be met unless the additional wind limit (which still gets the insured to full limit) upon renewal is considered “modest” or flat.
At Amwins we understand that both unique solutions and exclusive capacity are of the upmost importance in this transitioning market. Collaboration is a core tenet of our business, and we live it through our strategic partnerships with leading insurance carriers. No matter the coverage requirements, our top priority is helping you secure the solutions that best serve the needs of your clients.
Contact your local Amwins property broker today.