Condos hit with 563% rate increase

Marbella Condominiums Association board members (from left) Tom Baker, Jim Smith and Rob Lasch stand outside their beachside home, where property insurance has increased more than 500% since two hurricanes caused damage to the structure's back patio and pool in 2022.

Marbella Condominiums Affiliation board members (from left) Tom Baker, Jim Smith and Rob Lasch stand exterior their beachside residence, the place property insurance coverage has elevated greater than 500% since two hurricanes prompted injury to the construction’s again patio and pool in 2022.

DAYTONA BEACH SHORES, Florida – Tom Baker lives in a retirement dream constructing: A spacious three-bedroom beachside rental with unobstructed morning sunrises, waves marking the time and the delicate sand of consolation.

The retired Marine and Military veteran and his spouse Joan moved right here from the Tampa Bay space. She had a Daytona Seaside timeshare they usually visited. Ten years in the past they moved to their retirement residence: a fourth-story rental on the Atlantic Ocean.

“I completely love Daytona Seaside,” he stated. “I completely love the place I stay, and I really like this constructing.”

Daytona Beach Shores condo owner Tom Baker sent a six-page memo to all of Florida's senators and representatives, seeking help to rein in property insurance costs. He said one of the 160 legislators, Sen. Jason Pizzo, D-Sunny Isles Beach, responded to him.

Daytona Seaside Shores rental proprietor Tom Baker despatched a six-page memo to all of Florida’s senators and representatives, searching for assist to rein in property insurance coverage prices. He stated one of many 160 legislators, Sen. Jason Pizzo, D-Sunny Isles Seaside, responded to him.

So why does he appear so offended? Two phrases: Property insurance coverage.

For Baker and plenty of different Florida rental house owners, the very idea of insurance coverage – to ease worries throughout instances of misery – appears misplaced, particularly after the 2021 collapse of the Champlain Towers South in Surfside and the two-punch combo of the 2022 hurricane season: Ian and Nicole.

The latter storms simply over a yr in the past pounded a seawall exterior the Marbella Condominiums, then destroyed a pool and deck space. And the Surfside catastrophe, which killed 98 folks, shined a light-weight on structural security, delayed upkeep and the necessity for the state to enact extra strict rules to forestall future collapses.

As unhealthy as all of that was, for Baker, the true catastrophe arrived in December 2022: the property insurance coverage invoice for Marbella, the place he serves on the rental affiliation’s board.

For the 24-unit constructing, property insurance coverage jumped from $40,534 for 2022 to almost $269,000 – a 563% improve. And Rob Lasch, one other Marbella board member, stated he’s anticipating one other improve when the coverage supply arrives, which might be any day now.

And the rise got here despite a historical past of Marbella, which was inbuilt 2007, by no means having filed a declare, Lasch and Baker stated. There was no declare filed for the $2 million injury on the rental’s ocean-facing deck.

“Nothing acquired paid out for the injury exterior as a result of it was the seawall, and no person was insuring the seawalls,” Lasch stated.

So Marbella residents are getting hit exhausting on either side of the hurricane. They’re having to provide you with the total quantity to repair the injury, whereas additionally bearing the burden of elevated charges.

Baker stated his spouse desires to maneuver, leaving him to ponder merely not shopping for property insurance coverage for the constructing – one thing his fellow board members don’t help as a result of it violates Florida regulation and would go away the board members personally uncovered to lawsuits.

“In a minute, I wouldn’t pay one other dime in property insurance coverage, as a result of it’s unlawful, it’s immoral, and it’s mistaken. You possibly can’t justify this cost. That is out-and-out stealing. Theft,” he stated. “And excuse me for being passionate. I’m pissed.”

Different rental house owners additionally see exponential fee hikes

Marbella isn’t alone. Many rental associations throughout the state have stated they, too, have confronted astronomical property insurance coverage fee hikes.

Proper subsequent door, the 109-unit Grand Coquina Rental went from paying $207,000 for property insurance coverage in 2022 to $680,000 for 2023, a 228% improve, stated Jeff Sussman, the affiliation’s treasurer.

That amounted to a $2,331 extra evaluation per unit this yr, whereas Sussman initiatives one other evaluation of between $3,000 and $6,000 per unit can be required in 2024.

The Grand Coquina Condominiums, 3333 S. Atlantic Ave., in Daytona Beach Shores, saw a 228% increase in property insurance rates in 2023, despite the fact that its insurer denied a water damage claim. The condo association is fighting that determination.

The Grand Coquina Condominiums, 3333 S. Atlantic Ave., in Daytona Seaside Shores, noticed a 228% improve in property insurance coverage charges in 2023, although its insurer denied a water injury declare. The rental affiliation is combating that willpower.

Grand Coquina filed a declare searching for reimbursement for water injury its board members contend was attributable to wind throughout the storms. The declare was denied, stated Marro Porcelli, president of the Grand Coquina Rental Affiliation Inc.

Grand Coquina employed an lawyer and a structural engineer to problem the denial. Board members count on they are going to obtain a settlement supply.

“There’s loads of struggle left in us,” Porcelli stated. “We’re not giving in to the criminals.”

Marbella is comparatively new, constructed 15 years in the past beneath strict constructing codes. Consequently, it stands on 42 pylons which are 40 ft lengthy and attain right down to the exhausting core beneath the sand, Smith stated.

In different phrases, residents there are assured if the constructing itself may stand up to Ian and Nicole, it is unlikely to crumble anytime quickly.

And Smith stated the deductible for any catastrophe is $1 million.

That leads Baker to query what the insurance coverage is definitely protecting.

‘We do not have insurance coverage. We’ve got an insurance coverage invoice’

“If a twister got here throughout this constructing and ripped the roof fully off, our deductible is greater than the restore. If an atomic bomb goes off downtown, and blows this constructing down, we don’t accumulate due to the warfare clause,” Baker stated.

The Marbella Condominium Association, 3343 S. Atlantic Ave., in Daytona Beach Shores, was hit with a huge insurance increase last year and faces another increase, even while property insurance did not cover some $2 million in damage caused by Tropical Storms Ian and Nicole.

The Marbella Condominium Affiliation, 3343 S. Atlantic Ave., in Daytona Seaside Shores, was hit with an enormous insurance coverage improve final yr and faces one other improve, even whereas property insurance coverage didn’t cowl some $2 million in injury attributable to Tropical Storms Ian and Nicole.

“There is no such thing as a means this constructing can accumulate,” he stated. “This can be a concrete constructing with sprinklers. You couldn’t burn the rattling factor down in case you constructed a bonfire inside. We wouldn’t have insurance coverage. We’ve got an insurance coverage invoice.”

Baker has written to all 160 state lawmakers in addition to 15 information organizations concerning the plight of rental house owners. He went to Tallahassee throughout this yr’s session.

“I discovered one thing a very long time in the past within the army,” he stated. “In case you make a criticism, have a suggestion on easy methods to repair it, OK?”

He is proposed dropping the requirement that condos buy insurance coverage. And he is additionally talked about condos discovering a strategy to self-insure.

Largely, Baker stated his pleas have been ignored.

Baker met with Rep. Tom Leek, R-Ormond Seaside, who was receptive to at the least certainly one of his concepts. The workplace of Sen. Jason Pizzo, D-Sunny Isle Seaside, responded to a packet of data Baker mailed to all lawmakers. However in any other case, he is heard nothing.

Baker stated he is most upset in Sen. Tom Wright, R-New Smyrna Seaside, who represents Daytona Seaside Shores.

“For one yr, I’ve been making an attempt to get an appointment with Sen. Wright,” Baker stated. “I even went to his workplace. He walked proper previous me. He didn’t prolong me the courtesy of shaking my hand.”

Wright didn’t reply to a request for remark.

Leek, whose district contains Daytona Seaside Shores, likes at the least certainly one of Baker’s concepts.

Is self-insuring a good suggestion?

“We’re actively discovering methods to assist the Florida shopper, and permitting condominium associations to self-insure is a good suggestion. In truth, measures that improve competitors within the insurance coverage market and drive extra carriers into Florida will profit shoppers,” he wrote.

Mark Friedlander, Florida spokesman for the Insurance coverage Data Institute, stated Florida has lengthy had an advanced relationship with property insurance coverage, and it acquired more difficult with the Surfside collapse and the hurricanes of 2022.

Most of the insurers that supply rental protection began to tug again from the Florida market because of elevated threat on the older coastal properties, Friedlander stated in an e mail.

“The insurers that remained enhanced their underwriting standards. This started the development of great premium will increase for grasp affiliation protection,” he stated.  “Insured losses incurred from substantial property injury generated by hurricanes Ian and Nicole final yr additional impacted the provision and price of grasp rental insurance coverage,” Friedlander wrote.

Along with “grasp coverage prices” shared amongst all rental unit house owners, particular person rental house owners residing in high-risk properties are seeing their rental unit coverage premiums improve considerably – 50% to 100% on common, he added.

Over the previous two years, the Florida Legislature has handed a flurry of adjustments with the purpose of resolving the property insurance coverage disaster, to date to no avail.

A few of these measures embrace tweaking rules associated to Residents Property Insurance coverage Corp, the state-run insurer of final resort, authorizing actions to be taken by the Florida Workplace of Insurance coverage Regulation, and cracking down on bad-faith claims.

In an early November particular session, lawmakers allotted $181.5 million to the My Protected Florida House Program, which gives householders a wind-mitigation survey and grant funds to make houses extra sturdy.

Leek stated he is assured that what lawmakers have been doing has been executed is working.

Rep. Tom Leek, R-Ormond Beach, speaks during a Volusia County Legislative Delegation meeting in DeLand in October. Leek, the House budget chair, says lawmakers are working to resolve Florida's property insurance crisis.

Rep. Tom Leek, R-Ormond Seaside, speaks throughout a Volusia County Legislative Delegation assembly in DeLand in October. Leek, the Home funds chair, says lawmakers are working to resolve Florida’s property insurance coverage disaster.

“The Legislature’s insurance coverage reforms are taking maintain,” Leek wrote in response to questions. “New carriers are getting into the Florida insurance coverage marketplace for the primary time in years. Simply this month, a brand new service entered the Florida rental affiliation insurance coverage market.

“It is taking place and it does take time, and we are going to proceed to work to supply a local weather of competitors and selection,” he wrote.

Friedlander additionally referenced the brand new service as a constructive signal: “Final week, Florida’s insurance coverage regulator introduced {that a} new insurer, the Rental Homeowners Reciprocal Change, can be getting into the state’s market in 2024 and supply grasp rental coverage protection to associations. We hope this can be a primary step towards stabilizing the marketplace for this protection.”

Rental house owners socked with $64,000 in assessments

Because of either side of the property insurance coverage drawback – excessive charges and being awarded no claims for the injury, Marbella rental house owners have every paid roughly $64,000 in HOA charges and assessments in 2023, stated board President Jim Smith.

Tom Baker, a member of the Marbella Condominium Association Board, has been writing lawmakers, trying to get them to help stop property insurance rates from skyrocketing.

Tom Baker, a member of the Marbella Condominium Affiliation Board, has been writing lawmakers, making an attempt to get them to assist cease property insurance coverage charges from skyrocketing.

Baker acknowledges beachside rental house owners – significantly those that have to this point been capable of take up the excessive insurance coverage payments and the assessments to pay for damages – most likely do not appeal to a lot sympathy in Florida.

“Now us wealthy son-of-a-bitches, pardon me, we will handle one way or the other and get away with it,” he stated.

However different rental house owners have had their retirement goals dashed, transferring due to the excessive prices, whereas an exodus awaits if the issue isn’t contained, affiliation board members say.

They respect what Baker has executed to lift consciousness of the issue.

“He is taken this on, and he is very enthusiastic about it,” stated Jim Smith, the Marbella Rental Affiliation Board president.

Baker stated: “Individuals who moved down right here on mounted incomes and purchased themselves their ultimate place now discover themselves with an not possible invoice.”

Solutions: What is going on on with the stalled rental high-rise on A1A in Daytona?

This text initially appeared on The Daytona Seaside Information-Journal: Daytona Seaside Shores rental house owners name 563% insurance coverage improve ‘theft’

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