Insurance payments may be the single largest expense of an association’s budget.  Typically, and to over-simplify, the association pays for general liability insurance should someone get injured while on the association’s property.  In addition, the association pays for windstorm insurance which covers damages to the common areas should a storm hit and the property is damaged by wind.  In addition, the association pays for flood insurance should the common elements be damaged as a result of flooding.  Finally, the association also pays for director’s and officer’s liability insurance which insures these people against claims made against them as a result of their service on the Board.  There may be other policies the association has as well, like worker’s compensation, and even a policy that covers the association for liquor liability issues.  The association also better be purchasing insurance for the units that it now owns as a result of foreclosure, before they allow a tenant to reside in the unit.

Because the association has all of this insurance, often times when an owner suffers damages to their unit as a result of a broken pipe, or a fire, they look to the association for not only repair of the unit’s walls, floors and ceilings, but also the personal contents of their unit including furnishings, appliances artwork and more.  The law is clear however that in the absence of negligence on behalf of the association, the association must simply repair or replace the common elements, like the drywall.  Negligence on behalf of the association is often difficult, if not impossible to prove.

In fact, The Florida Statutes make it clear that the association has no responsibility to insure most everything within the unit and reads as follows when it comes to the association’s master policy:

The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. SUCH PROPERTY AND ANY INSURANCE THEREUPON IS THE RESPONSIBILITY OF THE UNIT OWNER.

So, if you don’t already own one, you certainly may want to find out about an HO-6 policy which covers those items not covered by the association’s master policy.  In addition, the policy provides at least $2,000.00 in coverage should your association pass a special assessment as a result of a catastrophic event like a hurricane.  Finally, if your unit causes damage to another unit, the policy provides you with coverage should a neighbor seek reimbursement from you for their damages.

We all hate paying for it, but when we need it, we’re glad we have it.

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