Condo Buildings With Uninsurable Roofs to Get Citizens' Coverage as They Pursue Replacement

Condominium buildings with roofs too old or too damaged to qualify for insurance will get some relief — the state’s insurer of last resort has agreed to cover the buildings if certain conditions are met.

Condos, mostly, and other commercial buildings were previously able to get insurance through the commercial insurance market for these risks. But the hardening underwriting market has left a gap, leaving some buildings uninsurable, said Jay Adams, chief insurance officer of Citizens Property Insurance Corp., in speaking to the Actuarial and Underwriting Committee of Citizens Board of Governors.

The Citizens staff proposed that high-risk buildings would be offered coverage only if a roof-replacement contract was in place, with a deposit paid. Insuring them during the transition period — meaning the time period while the roof gets replaced — will ultimately make it more likely the buildings will be able to get back into the commercial market, and off Citizens' rolls, Adams said.

Citizens' action arrives at a time when older condominiums are getting increased scrutiny, including new requirements to pass building inspections and undergo studies of condo associations’ solvency. The added rules were passed in the wake of the 2021 Surfside condo collapse after it was revealed that bickering and financial issues among the condo's board and residents delayed repairs that may have prevented the building's collapse and the deaths of 98 people.

Some on the actuarial and underwriting committee of Citizens’ board, which updates the state-created company's business lines according to recent legislation and oversees contracts, had questions about what kind of financial exposure this offer of transitional insurance to buildings undergoing roof repairs could mean for the state’s insurer of last resort. Citizens, they pointed out, by its nature already writes policies too risky for private insurers take on.

Carlos Beruff, chairman of the Citizens Board of Governors, noted that condo associations of 200, 300 and 400 people have a great deal of sway in Tallahassee.

“The pressure is … on us to write these uninsurable buildings, because these are well-organized condominium associations,” Beruff said. “Some of them are pretty expensive buildings, and all of a sudden, we're picking up the pieces. It sounds good when it's working, but it's going to clean our clock when it's not.”

Board members asked how many buildings would fit the criteria described in this update of rules, but the question went unanswered. The measure was approved without comment at the full Citizens Board of Governors meeting in Lake Mary Wednesday.

A spokesperson for Citizens said this new, transitional line of business will cover everything, but the roof-in-progress will mean coverage for these buildings is more defined.

"The thought was, it makes a more clear distinction of what's covered and what's not," said the spokesperson, Michael Peltier.