By Roxana Dorigo / Published September 2023
Florida community associations and property managers are grappling with the combined challenges of budgeting for rising insurance costs, reserve funding, elevated interest rates, and projects that have been deferred to comply with new state laws. Board members and managers do not need to combat these obstacles alone.
At our communities, we have invited insurance agents for town hall meetings to ensure board members and owners are armed with as much timely information and guidance as possible before budgets are finalized. Agents predict insurance costs will rise between 25 percent to 30 percent next year and possibly higher if another major storm like Hurricane Ian occurs. However, insurance is hyper-specific to each building. Coastal buildings are likely to see bigger premium increases than inland buildings, for instance. If a building is plagued with many leaks, it will have many claims that drive up the premium.
One insurance agent noted a looming issue with Citizens Property Insurance Corporation, which is our state’s insurer of last resort. If a major storm occurs anywhere in the state, Citizens is expected to issue emergency assessments to every policyholder regardless of their proximity to the storm. This agent did point out a positive recent measure passed by the Florida Legislature that could help the state with its insurance competition challenges. Historically, many insurers have shied away from Florida due to its litigious nature. Legislators addressed this with changes that make it much harder to sue insurance companies. Over time, this could give associations more options and hopefully lower rates.
Other key budgeting considerations include the following:
Timely information will be as valuable as any currency when finalizing association budgets for the upcoming fiscal year. Consult with the experts at your disposal to ensure your association is well informed and in the best position to navigate a complex budgeting cycle.
Executive Director of Association Finance, KW PROPERTY MANAGEMENT & CONSULTING. KWPMC
Roxana Dorigo is executive director of association finance at KW PROPERTY MANAGEMENT & CONSULTING. KWPMC is one of Florida’s largest residential property management companies, with more than 2,200 employees and 80,000 units under management. Its portfolio includes upscale high-rise towers, townhome communities, and homeowners’ associations. Visit www.kwpmc.com for more information.