As you all know, our annual insurance renewal occurs this month. To accept this renewal we must sign by Monday, June 12, 2023 prior to the June Board meeting on June 13, 2023. I am attaching information provided by our Insurance Broker, Negar Sharifi, Senior Vice President. Due to the diligence of James Taglia he was able to secure a proposal which reflects a 25.71% increase ($49,118.31). As you can see from the explanation below, we dodged a major bullet by not getting an excess of a 75% increase in the insurance premium.
My recommendation would be that we do a one-time assessment to cover the premium increase of $49,118.31. This can be done as 4 installments on your HOA account through HMI, or a one time payment. As you know, the amount that each member pays will be by the percentage per Unit size. We will post on the website the Unit type with the percentage number, but roughly $49,118.31 divided by 71 equals $691.81.
The Board wanted to get this information out to the membership, so you are aware of the status of our insurance as we must sign to accept prior to allowing any discussion at a Board Meeting.
Please find attached Lake Villas upcoming June 13th insurance renewal. The attached proposal lays out the specifics of the policies specifying the Limits, Deductibles, Coverages and Exclusions. We got VERY LUCKY with this renewal. While the average association in Florida is receiving premium increases in excess of 75%, Lake Villas is an outlier clocking in at a 25% year over year increase. To facilitate digesting this information I have provided bullet points below highlighting certain aspects of the program. The renewal is easy breezy with all of the carriers offering renewal quotes. Therefore it is as if the policies are merely rolling forward into the next year. If upon reviewing you have any questions at all please let me know and I will answer right away. Ok, here we go:
Notes:
- Insurance Marketplace: None of this would make sense if we don’t first start by explaining what is happening in the Florida property insurance world. I am sure you have already heard by now that we in Florida are currently in the midst of the worst insurance market in history. There are less property carriers offering coverage and those that are still writing policies, have implemented various underwriting restrictions such as Building Age, Construction Type, Roof Age and instituted Limit caps on how much they are willing to insure at any given location. It is so bad in fact that the state held an emergency legislative session last December in order to pass laws to help the insurance industry. However, those new laws aren’t expected to have any impact on rates until 2024 at the earliest. In the meantime condominium associations throughout Florida are seeing premiums spike anywhere between 60%-200% and only getting worse as we get closer to Hurricane Season.
The other difficulty us agents are facing is that we can’t get underwriters to send us your quotes until the last minute making our job, and the board’s, incredibly difficult. The reason for this logjam is that the underwriters are inundated with applications from all of the policyholders whose current carriers have gone out of business and they need to secure a new company to insure them. So less insurance companies = more work for underwriters to review files = stressed out underwriters that have too much on their plate and are behind on their work.
If you and the board are interested to learn more about how Florida’s insurance industry got into such a mess you can review the following material which will shed some light on the matter:
A. Email about the Florida Insurance Market: CLICK HERE – UPDATE: Post Hurricane Ian – 2023 Community Association Budget Outlook Email
B. Webinar from last week whereby my partner and I discuss the insurance law changes and discuss where rates are going: UPDATE: Insurance Market Updates & Community Association Budget Emails – Webinar Replay Links Included – AssuredPartners (Phil Masi & Negar Sharifi)
- Appraisal: You will see that the Insurable Limits have been increased by 12% from $11.2M up to $12.6M. Since property premiums are based in part on the policy limits/values, when they increase so too does the premium charged. Therefore that had an impact on the increase as well.
- Bid List: As you know I am an insurance broker. I don’t work for just one insurance company. AssuredPartners has contracts with all of the major carriers that are competitive in the Condominium and Homeowners Association insurance space. As such, we are able to bid your policies out to the various carriers in order to collect quotes on your behalf and present them to you. Many of the carriers declined to quote due to various reasons reflected on the bid list attachment page.
- Forms to Sign: Here is a link to sign the renewal forms. Please make sure they are signed no later than noon on Monday June 12. Once signed the verification email will come directly to us notifying my team that the applications were successfully signed. CLICK HERE to Sign Forms - Lake Villas Condominium, Inc.
- Down Payment Invoice: Attached
- Year-Over-Year Premium Comparison:
