Buying Condos In Daytona Beach Shores or in Ponce Inlet. What is new? Insurance
In good old days of before January 1 this year, there were fewer laws in Florida than today. We used to say that to own a condo in Florida it would cost you a Monthly Maintenance Fee and annual Property Taxes (and we all know about Special Assessments, which are as predictable as major hurricanes that they follow closely.) The new law adds mandatory insurance requirement, and it is called Homeowners 6 Policy. It forces condo owners to purchase a policy on the interior of their unit in addition to the Master policy, maintained by the Association, and which covers the building.
Here's how it is defined:
Part of the Insurance Services Office, Inc. (ISO), homeowners forms portfolio, insures a condominium owner for direct damage to unscheduled personal property on a broad named perils basis. Personal liability coverage and medical payments coverage are also provided by this policy. The policy is designed to coordinate with a policy covering the structure and common areas that is purchased by the condominium association."
There is a Master Insurance Policy for the Comdominium Building, however it does not cover the damage inside the unit as a result of, for example, water intrusion during the Hurricane. The law immediately became very controvercial and some lawmakers are already working on bills to change these requirements.
However, for now the law is in force. The policies under Homeowners 6 are to cover the units' interior. It requires unit owners to purchase loss-assessment coverage, that would help to pay Special Assessment levied after a hurricane, which is applied to the insurance deductible. Many companies already had the requirement to insure up to $1,000. Now it is $2,000. It also requires condo owners to name Condo Association as additionally insured.
The conentious issue is that the new law makes it mandatory rather than voluntary. The Associations have the authority to enforce the requirement, and they have the right to buy a policy for the unit and then charge the condo owner if they fail to purchase their own policy within 30 days of notice.
In the newspapers I read that the policy can cost from $1,000 for a 750 sf unit to up to $5,000 for a larger luxury units. I do not know how they got those numbers. We recently helped our client to buy a policy after the demand came from the association, and she got it for $152 a year. I am guilty for not reading fine print or any print in this case at all, but the Association has accepted it.
The other problem that I read about is that Homeowners 6 covers owners residing in the unit, and in Florida we have sometimes close to half of the units as vacation properties. Though obtaining insurance for non-residents is still possible, it can cost even more money, because this kind of coverage is considered high risk.
If you are Buying Condos In Daytona Beach Shores or in Ponce Inlet, keep in mind that there may be a letter giving you 30 days to provide proof of coverage. And if you do not want it to be from $1,000 to $5,000 a year, call me at 386-405-4408, as somehow our clients are getting it for just a fraction of that amount (but do not ask me how).
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