Over the last decade, Florida has faced the destructive force of numerous hurricanes and tropical storms. Some of the most notable hurricanes include Hurricane Irma (2017), Hurricane Michael (2018), and Hurricane Ian (2022), each leaving behind billions in property damage and economic losses. These storms have severely impacted condominium, homeowner (HOA) and townhome community associations.
For instance, Hurricane Irma (2017) caused an estimated $50 billion in damages, significantly affecting commercial and residential properties in South Florida. Similarly, Hurricane Michael, a Category 5 storm, caused widespread devastation in the Florida Panhandle, leaving behind over $25 billion in damages.
Property Damage in Community Associations
Community associations in Florida have experienced substantial damage due to these storms. Common types of damage include:
- Roof damage: High winds from hurricanes can rip off shingles, tiles, or entire sections of roofing, leaving buildings exposed to further damage.
- Flooding: Storm surges and heavy rainfall have caused extensive flooding, damaging both common areas and individual units.
- Landscaping destruction: Trees, shrubs, and other landscaping features are often uprooted or destroyed by high winds, leading to significant cleanup costs.
- Building exteriors: Windows, doors, and siding vulnerable to strong winds and flying debris have led to broken glass, structural breaches, and water intrusion.
- Infrastructure damage: Parking garages, swimming pools, and utility systems (ex. electrical, water) are often impacted by hurricanes and storms, causing major disruptions in community association operations,
These damages not only require extensive repairs but can also lead to significant insurance claims for community associations.
Insurance, Recovery, and Florida Community Associations
After a hurricane or storm, insurance plays a critical role in helping community associations recover from property damage. Associations typically carry various forms of insurance to cover damage to buildings, common areas, and other association property.
However, navigating insurance can be complex, particularly when dealing with large claims following major disasters. Board members must be diligent in understanding their association’s policy coverage, working with insurance professionals to ensure claims are filed correctly and on time.
New Florida Law: Insurance, Attorney’s Fees, and Litigation
In recent years, Florida has implemented legislative changes, specifically Senate Bill 76 (SB 76) and House Bill 305 (HB 305), that affect how community associations and homeowners can recover attorney’s fees and costs in insurance disputes. These laws were enacted to address the increasing number of lawsuits related to property insurance claims, particularly after hurricanes and storms.
Previously, policyholders could recover attorney’s fees if they successfully sued regarding an insurance company’s denial and/or payout relating to a residential or commercial property insurance policy. Under the old version of the law, the association’s legal fees were ultimately paid by the insurance carrier in this scenario.
However, for any policy issued after January 1, 2024, there is no longer a right to prevailing party attorneys’ fees. As such, if you are forced to sue your insurance carrier for a denied and/or underpaid claim under a residential or commercial property insurance policy, there is no longer a statutory right to attorney’s fees under Florida law.
To engage attorneys to prosecute your claim, your community association will need to enter into a compensation agreement with an attorney. Attorneys in this practice area typically work on a contingency basis, taking a percentage of the insurance payout as their fee.
This change places more financial burden on community associations that might need to engage legal counsel to fight for a fair payout after storm-related damage.
Senate Bill 76 (SB 76) also introduced a mandatory pre-suit notice requirement, which means that before a policyholder files a lawsuit against an insurance company, they must provide the insurer with written notice of intent to litigate. This gives the insurance company an opportunity to settle or resolve the claim without going to court.
While this can delay the legal process, it may encourage quicker insurance claim resolutions and reduce legal costs for Florida community associations.
Public Adjuster’s Role
When dealing with hurricane and storm damage claims, community associations often face the decision of whether to hire a public adjuster. Public adjusters are independent insurance professionals who can assist policyholders in negotiating insurance claims.
Here are a few factors Florida community association board members need to consider:
- Complexity of the insurance claim: For large or complicated claims, particularly when multiple association buildings or extensive damage is involved, a public adjuster can help ensure that all aspects of the damage are accounted for in the claim.
- Experience and expertise: Not all public adjusters have the same level of experience, particularly when dealing with complex community association claims. It’s essential to vet public adjusters carefully, looking for experience with community association claims and a strong reputation in the industry.
- Costs: Public adjusters typically work on a contingency basis, taking a percentage of the insurance payout as their fee. Board members should assess whether the potential increase in the claim amount justifies the cost of hiring a public adjuster.
Please note that insurance claims caused by a disaster that results in a declaration of a state of emergency by the Florida Governor (ex. Hurricane Milton), public adjuster fees are limited to ten (10) percent of the claim payment for one (1) year after the declaration of an emergency, thereafter the fee limit is twenty (20) percent.
Legal Resource
The community association’s attorney can play a crucial role in navigating the complexities of hurricane and storm-related insurance claims. They can help associations:
- Interpret community association insurance policy language
- Assess potential coverage and/or bars to coverage under the association policies
- Provide guidance on filing community association insurance claims
- Ensure compliance with existing and new legal requirements
Their experience and perspective can be invaluable in determining whether litigation or settlement is the best course of action, particularly when attorney’s fees and legal costs are at stake.
By involving the association’s attorney early in the process, Florida board members can work to safeguard their association’s financial interests and streamline the recovery process after a major storm impacts their community.
Questions about community association insurance, coverage, or other legal requirements? Do not hesitate to call 855-537-0500 or visit www.ksnlaw.com.
Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.
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