Bipartisan lawmakers seek to cut condo insurance costs through valuation pilot program

by | Dec 11, 2023



  • A pair of bipartisan lawmakers have introduced a bill aimed at creating a Condominium Windstorm Pilot Program to offer new insurance options for condominium associations using Citizens Property Insurance Corp. 
  • The measures posit changing the insurance model from covering the replacement cost of condo roofs to their actual cash value, which includes depreciation.
  • The shift in valuation could lead to lower insurance premiums and boost resale values, benefiting especially older condos.
  • Citizens Property Insurance Corp. has not yet taken a position on the proposed bills.

In a bipartisan move, Florida lawmakers have introduced legislation that seeks to establish a Condominium Windstorm Pilot Program, which would provide a new insurance option for condominium associations.

The bills, Senate Bill 802 and House Bill 655, filed by Republican Sen. Ana Maria Rodriguez and Democratic Rep. Hillary Cassel in their respective chamber, propose allowing condominiums that use Citizens Property Insurance to insure their roofs based on actual cash value instead of the replacement cost. The shifted model, if adopted, is expected to lower insurance premiums and enhance resale values for condos, particularly older structures facing financial strains due to recently implemented safety regulations.

“Florida has taken tremendous steps in the past few years to increase condominium safety and association financial health,” said Cassel. “But, we owe it to our residents to find common sense solutions to help ease financial burdens. This bill is one of those solutions. I am extremely proud to lead a bipartisan effort to reduce insurance premiums in Florida.”

Citizens Property Insurance currently uses a Replacement Cost Value (RCV) approach for assessing and replacing damaged condominium rooftops. This method calculates insurance premiums based on the current cost of replacing the rooftop without considering depreciation. However, a shift to an Actual Cash Value (ACV) would result in the condition and depreciation of the rooftop to be taken into account when assessing it for damage and replacement.

This change, according to lawmakers, could lead to lower costs for policyholders, offering them more options and potentially reducing windstorm insurance premiums. Under the bill, to participate in the pilot program, condominium associations must show proof of fully funded roof reserves and disclose the selection to all unit owners.

“South Florida’s condominium associations are plagued with high premiums,” said Rodriguez. “With this bill, we will open up an avenue for condominiums to reduce their cost and increase consumer choice in the marketplace.”

Upon outreach, representatives for Citizens Property Insurance Corp. informed The Capitolist that it had not yet taken a stance on the bills.

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