CALL Lobbies Tallahassee to Let Community Associations Form 'Self-Insurance Funds' to Spread Risk, Stem Rate Hikes
TALLAHASSEE, Fla., Jan. 10 /PRNewswire/ -- Representatives of Florida condominium and homeowner associations statewide are lobbying legislators meeting in the state capitol this week to include language in upcoming legislation that will let associations band together for the first time to collectively bargain to hold down skyrocketing property insurance rates for Floridians living in condos and HOAs.
The core of the effort, led by the Community Association Leadership Lobby (CALL), an advocacy group formed in 2003 to advance the interests of community associations statewide, focuses on substituting language in an obscure clause in state Statute 624 that for years has specifically blocked more than 48,000 Florida condos, HOAs and other community associations from organizing to get better insurance rates.
New legislative language put forward by CALL and under consideration this week by banking and insurance committees in both the Florida Senate and House of Representatives could have a positive impact on upwards of 4 million community association property owners and residents, by removing a specific restriction against community associations that has kept them from organizing into not-for-profit "self-insurance funds" for pooling and spreading their liability risk on commercial property or casualty or surety insurance.
Property owners and residents living in Florida common-interest ownership communities have been among the hardest hit by spiraling insurance rates in the state, for several reasons. Unlike most other homeowners in Florida, for example, community association property owners are required as an association to carry full replacement value coverage on their buildings and facilities. At the same time, they must carry commercial/residential insurance policies, premiums for which have risen sharply because there are now only two re-insurance companies underwriting those types of policies in Florida.
"Because Florida law has specifically denied them the right to organize to spread their insurance risk across community associations throughout the state, to date these common-interest ownership communities have been unable to effectively act to halt the skyrocketing insurance rates that are wreaking havoc on their community finances," said Donna D. Berger, CALL Executive Director and a community association attorney with the Ft. Lauderdale-based firm of Becker & Poliakoff.
"State Representatives and Senators meeting in Tallahassee this week and next have an historic opportunity to change the law in this regard and give millions of property owners and residents of Florida community associations the same rights already granted many industry and professional organizations to band together in order to spread liability risk and obtain better insurance rates for their communities," Ms. Berger said.
The proposed change to the law under consideration by legislative committees in Tallahassee this week and during the Special Legislative Session that kicks off Jan. 16 would give groups of community associations the same rights as other groups to organize into so-called "commercial self-insurance funds" operating through a not-for-profit trust or corporation. Other groups that currently have that right, for example, include not-for-profit trade associations, industry associations, or professional associations of employers or professionals, as well as groups of health care providers.
If passed by the respective banking and insurance committees in both the Florida House and Senate, the legislation would proceed to the floor of each chamber for a vote next week. If passed, the legislation would take effect immediately upon being signed into law by Governor Charlie Crist and would require the state's Department of Business and Professional Regulation to adopt rules for its implementation.
In October, CALL released results of a statewide survey of residential property owners in Florida community associations that found 87 percent of respondents said they will be liable for increases in storm-related insurance costs in their communities this year. Nine out of ten respondents to the survey said "No" when asked if elected officials are "doing everything they can to keep insurance costs reasonable for homeowners in Florida," and nearly two-thirds (64 percent) said they want more government regulation of the private insurance industry.
More information about the activities of the Community Association Leadership Lobby (CALL) and its insurance survey of property owners in community associations statewide can be found at the organization's website online at: www.callbp.com.
About the Community Association Leadership Lobby (CALL)
The Community Association Leadership Lobby is the leading organization working to enhance the quality of life and protect property values for Florida's community association residents. CALL advocates on behalf of more than 4,000 member communities, including condominiums, homeowners' associations, mobile home communities and cooperatives throughout the state. More information on the Community Association Leadership Lobby can be found at www.callbp.com.