By:  Jay Steven Levine, Esquire

A significant decision just handed down by the Fourth District Court of Appeal is the case of Citizens Property Insurance Corporation v. River Manor Condominium Association, Inc., Case No. 4D12-901 (Fla. 4thDCA April 10, 2013).  In the Citizens case, the Association sought to force Citizens to provide coverage for several items excluded in the insurance policy, arguing that F.S. 718.111(11) (the insurance provisions in the Condominium Statute) dictated this result.

F.S. 718.111(11) obligates the Association to insure for all portions of the condominium property outside of the units and other portions of the units.  The court disagreed with the Association, holding that insurance companies are governed by the insurance code and not by the Condominium Statute.  There is no provision in the insurance code which dictates the level of insurance required for a property damage policy in a condominium.  The court concluded that Citizens had the right to have policy exclusions, and doing so does not conflict with F.S. 718.111(11).

The court recognized that only the Association and unit owners are governed by F.S. 718.111(11), under which the Association is obligated to use its “best efforts” to secure the adequate coverage.  The court did not provide much guidance as to what constitutes “best efforts”, but did recognize that the Association would not violate the “best efforts” standard if coverage is simply unavailable for purchase in the marketplace.

The problems with this decision are multi-faceted and comes just prior to the start of the 2013 hurricane season, with the National Oceanic and Atmospheric Administration (“NOAA”) predicting at least 13 named storms for this hurricane season.

No longer may the Association assume that the insurance policy provided by the insurance company automatically tracks the obligations of the Association under the Condominium Statute.  Instead, it is now incumbent upon the Association to contact the insurance agent now and also prior to renewal of the insurance policy to discuss how the Association may insure for the items excluded by the offered insurance policy.  This may result in the Association having to seek and pay for endorsements or actually go to another insurer to seek supplemental coverage.  This all could translate to the Association spending more money for the insurance policies than originally contemplated.  Unfortunately, this decision creates a question whether the Association could decline coverage simply because it is very expensive for the Association.

The Association should contact its legal counsel for its interpretation of this court decision and to assist in determining the exclusions which may have to be insured through endorsements or separate coverage.  Directors should be aware that the failure of an Association to insure for exclusions could result in the Association and its directors being sued for additional expenses to be assessed against the owners because the Association failed to insure for the exclusions and thereby maintained inadequate insurance coverage.  Directors should also be aware that the typical directors and officers liability insurance policy will not cover for insurance decisions, in which case the directors who would have to engage separate counsel or prevail on the Association to pick up the defense at the Association’s own expense.  A director in this position could also face personal liability for purposefully failing to properly insure for property damage.

Jay Steven Levine, Esquire with the Firm has developed a niche practice for the Firm in the area of insurance, casualty and property damage recovery.  Mr. Levine’s expertise includes pursuing insurance companies for property damage, advising on the insuring and reconstruction obligations of the Association, and amending documents on the subject.

We refer you to the Firm’s website at, which contains an article entitled “Are you Ready for the 2013 Hurricane Season?”, which you should review in preparation for this hurricane season.