In the wake of the recent Surfside tragedy, a law firm that represents insurance policy holders in claims against insurance companies is warning policyholders and condo associations to brace themselves for a shift in both insurance costs and coverage.

Chip Merlin, president of the Tampa-based Merlin Law Group, a firm specializing in first-party property claims, said the Champlain Towers collapse has rocked the condominium insurance industry, spurring much-needed changes and oversight in a short period of time.

He said the condominium insurance market is facing significant changes but does not expect most of the significant changes to Florida legislation or insurance regulations will occur until the investigation into the Surfside collapse is complete.

But condo owners and associations should be prepared.

He explained condominiums in South Florida are already considered high-risk due to their common ownership structure, exposure to hurricane and tropical storm activity, and reputation for delaying much-needed maintenance to their infrastructure. Miami-Dade and Broward are the only Florida counties currently requiring condominiums to conduct a reinspection after 40 years.

He said, “With more than 50,000 community associations throughout the Sunshine State, insurers sending action letters demanding reinspection verification could have a ripple effect extending out of just Miami-Dade and Broward.

“Condo associations and unit owners can soon expect likely increases to premiums amidst a growing scarcity of insurance providers. Multiple insurance carriers are enacting potential 45-day cancellation notices if buildings 40 years and older cannot prove they have passed all inspections,” Merlin said.

“The most pressing risk facing residents is that if more carriers drop condo buildings due to their failure to prove recertification, the costs will rise for everyone. Insurers will require condos to address any structural issues, meaning residents will have to foot the bill to remain insured. Condos may be forced to move to state-owned Citizens Property Insurance Corp. if their private insurers drop them,” Merlin said.

While these changes mainly apply to the condominium’s building policy, residential policyholders may face changes to their own insurance policies that cover items inside the property. These policies carry coverage for special loss assessments which typically includes unexpected minor damages, not routine maintenance.

He warned, “If lawmakers decide to impose stricter regulations that require loss assessment coverage, insurers may choose to drop their condo policies altogether.”