Insurance

The following chart shows Jupiter Bay's total cost of insurance for the years 2004 through 2023:

Prior to meeting with the insurance agent, association management may wish to perform an insurance audit. The auditing process involves examining and analyzing the assets and property that need to be covered by the insurance policy.

In Jupiter Bay's case, our common area property assets include: 14 condo buildings, two swimming pools, 2 pool cabanas, a spa, spa & pool filter equipment & heaters, 2 tennis courts, 2 pump houses, pool shade structures, recycle bin enclosures, parking lot & street lighting, signs, flag pool, pedestrian bridge, BBQ grills, emergency generator/fuel tank, and fences & walls.

The following worksheet, provided by Gray Systems, Inc., provides an example of a worksheet for itemizing what needs to be covered by insurance and for guiding the analyzing of association's needs:

It is the responsibility of the board of directors to protect the common elements by assuring appropriate insurance coverage. Failure to provide adequate insurance is one of the liability coverage exclusions.

Florida's hurricane season runs from June 1st until November 30th.  After a hurricane it's important to survey your condominium unit and access and document any damage.  The following form will facilitate this process.

It generally pays to contact a local agent who will shop for the best insurance policy for your needs.  According to the Palm Beach Post, the top 12 Florida property insurers are:

An owner who has suffered a loss inside their unit should report the loss to their H06 insurance carrier.  In addition, they need to complete an Insurance Claim Form (see below) and provide it to the Association Management Office.  The Office will forward a copy of this form to the Association's Insurance carrier for their review for any coverage under our master policy.

Condominium Associations typically have eight master insurance policies on the condominium property and staff, including: Property & General Liability, Boiler & Machinery, Island Marine, Wind, General Liability, Crime, Directors & Officers Liability and Umbrella.

The Property and Wind policies cover all of the buildings and other structures within the community, including all parts of the buildings exclusive of the individual units.  This includes the exterior walls, doors, catwalks, stairways, elevators, storage rooms, trash rooms, air conditioner compressor areas, recycling areas, and attached buildings or structures housing mechanical or electrical (e.g. master circuit breakers or generators) equipment.  It also includes:

• All portions of a unit, except interior surfaces, contributing to the support of the unit building including but not be limited to the outside wall of the unit building and all fixtures on its exterior, boundary walls of units, floor and ceiling slabs exclusive of finished surfaces and plaster, load-bearing columns and load-bearing walls.

• All conduits, ducts, plumbing, wiring and other facilities for the furnishing of utility services contained in the portion of a unit maintained by the Association.  This includes electrical wiring up to the unit’s circuit breaker panel, water pipes up to the individual unit shut-off valve, cable TV lines up to the wall outlets in the unit, and sewer and fire sprinkler lines up to the point where they enter the unit.

• All such facilities contained within a unit that service part or parts of the condominium other than the unit within which contained.

Jupiter Bay is a multicondominium association consisting of 8 individual associations and a shared common area consisting of two pools, recreational areas, sidewalks, parking lots, pump buildings, a lake, etc. Florida statute 718 defines “Multicondominium” as real property containing two or more condominiums, all of which are operated by the same association. Both the FL statutes and Association bylaws segregate common expense for an individual association (bylaw class A expense) and common expense for managing and maintaining areas shared by all 8 associations (bylaw class B expense). Paragraph 718.115(1)(b) of the statute says that “The common expenses of a condominium within a multicondominium are the common expenses directly attributable to the operation of that [specific] condominium.” FL Administrative code 61B-22.002 says that “Multicondominium associations shall maintain separate accounting records for the [master] association and for each condominium operated by the association.”

The Association has 9 insurance policies. Six of these policies apply to the requirements and cost of operating the master association.  These include equipment breakdown, island marine (equipment floater), crime & theft, directors & officers’ liability, umbrella, and workers compensation. The other three policies (commercial property & liability, general liability, and wind insurance) have components specific to both the master association and each individual association. The premiums for these policies are based on the assessed value of the associated assets and the cost of insuring these assets based on age, condition, construction quality, current code compliance, etc.

The Association’s wind insurance policy has been with Frontline Insurance since 2017. However, for this insurance period beginning February 15, 2023, Frontline has only agreed to insure the 4 East buildings, requiring the Association to obtain wind insurance from Citizens, Florida’s insurer of last resort, for the remainder of our property – West, Villas, and community common areas. Citizens rates are significantly higher. For this reason, the West buildings and Villas are being burdened with a disproportionate share of wind insurance cost, and all 359 units will pay more for their common expense allocation.

FL Statute 718.111(11)(g)3. says that “A multicondominium association may elect, by a majority vote of the collective members of the condominiums operated by the association, to operate the condominiums as a single condominium for purposes of insurance matters, and that the election to aggregate the treatment of insurance premiums constitutes an amendment to the declaration of all condominiums operated by the association.” The requirement for declaration amendments implies that a 75% approval vote would be required by each association.  Jupiter Bay’s membership has never adopted this provision, and obtaining the necessary votes for approval would be difficult. Consequently, we are required to separately calculate and charge the costs for property and wind insurance to the specific association/building.

All unit owners are encouraged to obtain a home owner insurance policy covering all personal property within the unit and limited common elements.  This will protect the owner from property damage to their unit, liability claims against the unit owner, and Association property loss assessments.  The Association’s insurance policy covers damage to air conditioner compressors located on common Association property.  All Association buildings are in FEMA flood zone B, requiring no flood insurance.

Following are the specific statutes that address requirements for unit owner insurance policies and unit owner responsibilities:

• a. FL Statute §627.714 — “Coverage under a unit owner’s residential property policy must include at least $2,000 in property loss assessment coverage for all assessments made as a result of the same direct loss to the property, regardless of the number of assessments”.

• b. FL Statute  §718.111(11)(g)2 — “Unit owners are responsible for the cost of reconstruction of any portions of the condominium property for which the unit owner is required to carry property insurance, and any such reconstruction work undertaken by the association is chargeable to the unit owner and enforceable as an assessment”.

• c. FL Statute §718.111(11)(j)1 — “A unit owner is responsible for the costs of repair or replacement of any portion of the condominium property not paid by insurance proceeds if such damage is caused by intentional conduct, negligence, or failure to comply with the terms of the declaration or the rules of the association by a unit owner, the members of his or her family, unit occupants, tenants, guests, or invitees, without compromise of the subrogation rights of the insurer”.

• d. FL Statute §718.111(11)(j)2 — “The provisions of subparagraph 1 (see “c” above) regarding the financial responsibility of a unit owner for the costs of repairing or replacing other portions of the condominium property also apply to the costs of repair or replacement of personal property of other unit owners or the association, as well as other property, whether real or personal, which the unit owners are required to insure”.

• e. Jupiter Bay’s Declaration of Condominium paragraph 9.1 — “Each individual unit owner shall be responsible for the pur­chasing of liability insurance for accidents occurring in his or her own unit”.