Saturday, July 24, 2010

Change in Florida Homeowner's Condo Insurance Law

Good news for investors. A recent change in the Florida law no longer requires condo owners to show proof of hazard insurance to the governing association. As you might know, the condo building insurance covers all the common areas and the roof. Unit owners can obtain coverage for the inside of the unit; water and fire damage to the structure and flooring and coverage for personal possessions, if desired. In the past, associations could force unit owners to obtain coverage for structural damage. Now they can't.

For investors, this can significantly increase their cash flow since it is more money in their pocket. Of course, they are now at greater risk for out-of-pocket payment for damage. For example, a tenant who does not report a leaking pipe until it floods the unit and leaks through to the unit one floor below will cost the unit owner not only the repairs to their own unit but they also have to pay for the damage their tenants caused to any units below them.

So, life's a risk. At least now unit owners have a choice.

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