Fla. State Rep. Introduces Bill to Limit Condo Coverage to Actual Cash Value

A bill introduced by a Democrat and trial attorney would take a step toward something that property insurers have longed for in recent years – actual cash value coverage on roofs, at least condominium roofs.

State Rep. Hillary Cassel, D-Dania Beach, this week pre-filed House Bill 655, which would establish a condominium windstorm pilot program just for the state-created Citizens Property Insurance Corp. The measure may have bipartisan support: A companion bill, Senate Bill 802, was filed by Sen. Ana Maria Rodriguez, a Republican from Doral.

The legislation would allow Citizens to offer actual cash value on condo roofs that are heavily damaged in a storm, instead of full replacement value. Replacement of roofs has proven to be a key cost driver for Florida property insurers in recent years. Cassel said her bill could be a partial solution to escalating premiums, premiums that have left a number of condo owners and associations without wind coverage.

“Florida has taken tremendous steps in the past few years to increase condominium safety and association financial health,” Cassel wrote on Facebook. “But we owe it to our residents to find common sense solutions to help ease financial burdens.”

The bills would require a majority vote of the condo association to participate in the pilot program.

The problem with ACV is that it may help reduce premiums, but it could still leave a condominium building without a roof, said Michael Carlson, president of the Personal Insurance Federation of Florida, which represents some of the largest property insurers in the state.

“The downside is that the condo association may not have the funds to pay for what ACV won’t cover,” he said.

He gave this example: If a condo building sees its roof heavily damaged, the insurance may pay only $15,000 as actual cash value. But to fully repair or replace the surface may cost $30,000. That leaves the condominium owners having to pay $15,000 out of pocket. And that’s on top of other costs that may be incurred from more-frequent building inspections and repairs, as well as reserve funding measures required by Florida condominium laws passed in the wake of the 2021 Champlain Towers South collapse.

Cassel could not be reached for comment. The regular 2024 Florida legislative session is set to begin Jan. 9.