By:  Jay Steven Levine, Esquire 

The focus of this article is property damage and insurance coverage in a casualty event.  The most pervasive casualty event is a hurricane or tornado.  However, there are more common every day events which are caused by a casualty.  These include fires, bursting pipes, air conditioning condensate line leaks, water heaters bursting, overflowing toilets and leaking shower pans.  Essentially, if an event is identifiable, sudden, unexpected and unusual in nature, the event is most likely to be considered a casualty event.

It is important to know whether property damage results from a casualty event because there are different considerations in the statutes and governing documents which will come into play.  It is also important to realize that property damage insurance will cover property damage only where the cause is a casualty event versus deficient maintenance or damage caused over a long period of time.

Insuring Obligation

What is the insuring obligation of the association?

F.S. 718.111(11), applicable only to condominium associations, contains provisions obligating the association to carry insurance coverage for specified building components within the condominium.  The statute is designed to apply irrespective of any provision to the contrary in the declaration.  The statute also recognizes that the insurance policy may include deductibles which are determined by the board, and dictates the level of the deductible and establishes procedures for the notice of the board meeting at which the insurance policy with deductibles are approved.

Chapter 720, Florida Statutes, which applies only to homeowners associations, contains no guidance on the insuring obligation of the association.  Therefore, the declaration of covenants and restrictions will control.   The association should consult with its association attorney to the extent that the declaration is unclear or provides an over-burdensome obligation upon the association.

F.S. 719.104(3), applicable only to cooperative associations, simply obligates the cooperative association to obtain and maintain adequate insurance to protect the “association property”.  This could mean the entirety of the improvements within a cooperative building which are leased to an owner pursuant to a proprietary lease.

Obligation to Repair

What is the obligation of the association to reconstruct and repair property damage after a casualty event?

Under F.S. 718.111(11), a condominium association is obligated to repair and reconstruct those building components which the association must insure under the statute.

Chapter 720, Florida Statutes, applicable to homeowners associations, and Chapter 719, Florida Statutes, applicable to cooperative associations, contain no guidance on the issue of the obligation of the association to repair and reconstruct casualty damage.  Again, here, the governing documents will control.  The association should consult with its association attorney to determine if the governing documents are adequate on the subject.

Construction Contract

There are often times when the association will need to enter into a construction contract to repair casualty damage.  The area of construction law is very complicated and therefore the association should engage its legal counsel to draft the agreement to ensure that the association is best protected.  A little money spent up front with the association’s attorney could prevent countless problems and a large expense to the association who was not represented properly.

Access Into Units

There are times when the association will need to access the unit in order to make repairs.  What right does an association have in this regard?

F.S. 718.111(5) permits a condominium association and F.S. 719.104(1) permits a cooperative association to enter a unit where necessary to make repairs or prevent damage to other units or to the common elements.  Unfortunately for homeowner associations, there is no statutory guidance, and therefore access is questionable.


There are also times when a casualty event causes water damage with resulting mold.  Experts have held that mold can form when humidity levels exceed 70% within a unit or the ambient temperature in the unit is higher than 80 degrees.  Associations should educate their members with regard to these statistics.  Once mold is discovered, the association should undertake a procedure to assess the mold problem and obtain an outline of removal of the mold (known as remediation) ranging from dehumidifying the unit, to cleaning and disinfecting, and finally to remediation repairs.  The association should consult with its legal counsel when the association intends to expend association funds to dry out building components which the association does not insure or maintain.

Filing Insurance Claims

When an association is faced with a property damage claim caused by a casualty event, the association should immediately contact its insurance agent and discuss the effect of filing a claim on the loss run history of the association.  Loss run history will affect the ability of the association to renew its insurance policies and may affect the level of premiums in the future.  Most times the agent will agree and recommend that the association file an insurance claim.  The agent will then forward the claim to all of the association’s insurance carriers requesting coverage for the loss, and request that the insurance company assign an adjuster to commence the adjustment process.

There are times when the insurance company demands a proof of loss from the association.  The association must provide one as part of the duty of cooperation imposed by a typical insurance policy.  This is a critical document which should be prepared with the aid of legal counsel, as the proof of loss could affect the ability of the association later on to recover more than what the insurance company is willing to pay.

Also as part of the duty of cooperation, the association must permit the insurance company, upon its request, to review the records of the association and to take witness statements.  As with the proof of loss, the association’s legal counsel should be involved in this process, as it could impact the ability of the association to recover money in the future.

A very significant change in the law in 2011 involved an amendment to F.S. 627.7011, which is part of the insurance code applicable to all properties within the state of Florida.  Except in the case of a total loss, the statute allows insurers to now pay only the actual cash value of an insured loss from a dwelling (less applicable deductibles).  Prior to this change, the insurer was obligated to pay upfront the full replacement cost less deductible, and not just the actual cash value of the damaged property.  In order for the association to obtain the remaining amounts so to recover the full replacement value (less deductible), the association must enter into a contract for the performance of building and structural repairs, with the insurer paying the remaining amounts once the repairs are made.  The net effect of this new law could financially impact associations.  Associations should consult with its legal counsel in order to best approach such effect.

The information contained in this Article is intended to provide general information and is not regarded as rendering specific advice to your particular Community Association.  While we make every attempt to ensure that the information contained herein is accurate and complete, the Levine Law Group is not responsible for any omissions, or for the results obtained from the use of this information.  Furthermore, we are not responsible for the applicability of any such information to your particular situation. The information in this Article does not constitute legal advice and is not intended to be a substitute for legal counsel.  You are urged to contact your Association’s attorney should you have questions on the applicability of this Article to your Association.  Please be aware that the legal principles as referred to in this Article are subject to change from time to time.