Rep. Mike Fasano and Dr. Jack Nicholson, who runs the state-backed reinsurance organization (the Florida Hurricane Catastrophe Fund), are in a bit of a back-and-forth over what should and shouldn’t constitute a “residential property” for insurance purposes.
It’s a bit wonky, but Fasano says Nicholson’s interpretation of Florida’s statutes could cost condo associations thousands of dollars in rate hikes, if the Cat Fund stops covering their buildings.
According to Fasano (R-New Port Richey), a change to the Cat Fund’s coverage policy would disqualify condominium buildings where units are being rented for more than six months of the year from receiving state-backed reinsurance.
He said the change could force some condo associations to see their insurance rates double, as private insurers and state-run Citizens Insurance rely on the Cat Fund for low priced back-up insurance.
Fasano believes Nicholson and the Cat Fund have gone beyond the scope of the Florida Statutes by implementing the restriction on condos that have units rented out for more than half the year.
“Distinguishing between policies for condominium structures and condominium units based on rental criteria also seems to be contrary to Section 718.1256, Florida Statutes,” he wrote in a letter to Nicholson, outlining statutory language that states condos should be classified as residential property. The Cat Fund is required to provide coverage for residential properties.
Nicholson responded Friday, arguing that he was complying with the law because the rented condo units are “transient rental property,” and therefore not considered “residential property” eligible for Cat Fund coverage.
“An exclusion of transient rentals from the term ‘residential property’ is consistent with other statutory provisions,” wrote Nicholson.