Repair after casualty has created more headaches in condominiums in the last two years than anything else. One of the main reasons: Florida Statutes FS 718.111(11) is open to all kinds of interpretations. We have seen cases were four attorneys offered four different opinions -- leaving board members and owners baffled. Ombudsman Dr. Virgil Rizzo's letter to condominium boards dated  November1, 2005, explains his reasoning and interpretation of the Florida statutes. 

The DBPR, Division Chief Michael Cochran, issued on January 13, 2006, a Declaratory Statement (Docket No.2005059934) to the Plaza East Condominium, explaining rights and obligations of associations under the existing law.

Nevertheless, the headline of Mark Bogen's column says it best: 

Hazard insurance a source of confusion

By Mark Bogen, Special to the Sun-Sentinel

Posted November 20 2005

Q. Our condominium residents have suffered a great deal of damage to their units [from Hurricane Wilma]. Our insurance agent told one of the board members that anything on the perimeter of the unit is covered by the association policy, while any damage to the inside of the unit is covered by the unit owner. Is this true?

A. No, it is not true. There has been a great deal of confusion over what is covered by the association's policy and what is the responsibility of the unit owner.

"Every hazard insurance policy issued or renewed on or after Jan. 1, 2004, to protect a condominium shall provide primary coverage for all portions of the condominium property located outside the units," according to Chapter 718 of the Florida statutes.

The statute also says the hazard insurance should cover all condominium property inside the unit that initially was installed with the original plans and specifications, and replacements, as long as they are of like kind and quality as the original. Please ask your insurance carrier or association attorney if you have questions about that coverage.

Not covered by the association's policy are personal belongs and furniture, of course, as well as all floor, wall and ceiling coverings, electrical fixtures, appliances, air-conditioner or heating equipment, water heaters, water filters, built-in cabinets and countertops and window treatments, including curtains, drapes, blinds, hardware and similar window treatment components.

FS 718.111 (11)  INSURANCE.-- 
(a)  A unit-owner controlled association shall use its best efforts to obtain and maintain adequate insurance to protect the association, the association property, the common elements, and the condominium property required to be insured by the association pursuant to paragraph (b). If the association is developer controlled, the association shall exercise due diligence to obtain and maintain such insurance. Failure to obtain and maintain adequate insurance during any period of developer control shall constitute a breach of fiduciary responsibility by the developer-appointed members of the board of directors of the association, unless said members can show that despite such failure, they have exercised due diligence. An association may also obtain and maintain liability insurance for directors and officers, insurance for the benefit of association employees, and flood insurance for common elements, association property, and units. An association or group of associations may self-insure against claims against the association, the association property, and the condominium property required to be insured by an association, upon compliance with ss. 624.460-624.488. A copy of each policy of insurance in effect shall be made available for inspection by unit owners at reasonable times. 
(b)  Every hazard policy which is issued to protect a condominium building shall provide that the word "building" wherever used in the policy include, but not necessarily be limited to, fixtures, installations, or additions comprising that part of the building within the unfinished interior surfaces of the perimeter walls, floors, and ceilings of the individual units initially installed, or replacements thereof of like kind or quality, in accordance with the original plans and specifications, or as they existed at the time the unit was initially conveyed if the original plans and specifications are not available. However, unless prior to October 1, 1986, the association is required by the declaration to provide coverage therefor, the word "building" does not include unit floor coverings, wall coverings, or ceiling coverings, and, as to contracts entered into after July 1, 1992, does not include the following equipment if it is located within a unit and the unit owner is required to repair or replace such equipment: electrical fixtures, appliances, air conditioner or heating equipment, water heaters, or built-in cabinets. With respect to the coverage provided for by this paragraph, the unit owners shall be considered additional insureds under the policy. 
(c)  Every insurance policy issued to an individual unit owner shall provide that the coverage afforded by such policy is excess over the amount recoverable under any other policy covering the same property without rights of subrogation against the association. 
(d)  The association shall obtain and maintain adequate insurance or fidelity bonding of all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. As used in this paragraph, the term "persons who control or disburse funds of the association" includes, but is not limited to, those individuals authorized to sign checks and the president, secretary, and treasurer of the association. The association shall bear the cost of bonding.