Evaluations necessary to meet increased insurance premiums

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Dear Poliakoffs,

I recently received a notification from my condominium association that there is a $500,000 shortfall in the budget regarding our insurance premiums. Starting next month, all unit owners will be charged a certain percentage to cover this gap. To me this is not quite right, because we all paid monthly association dues as expected – how can they now come back to us and charge more than they originally charged? Am I wrong about this? Seems like a scam to me.

Signed, RB

Dear RB,

Due to a number of market factors, including the Surfside tragedy (the collapse of Champlain Towers South), many insurance companies left the Florida market and the cost of insurance increased significantly. Many of our customers have reported premium increases of hundreds of thousands of dollars. So if your insurance renews in the summer, it’s no surprise what you’re talking about (I’ve heard plenty of reports of similar increases). The association is legally obligated to have insurance and must somehow pay for this premium increase – the only solution is to raise your appraisals. This can be accomplished in one of two ways. The board can either change the annual budget and collect incremental reviews for the remainder of the year (which it seems in your case), or the board can go through a special review to raise enough funds to close the gap.

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