Florida Condo Association Insurance Crisis: Why Carriers Are Leaving and What to Do About It

The short answer: At least a dozen property insurance carriers have exited or dramatically reduced their Florida condominium association business since 2020. The result is fewer coverage options, higher premiums, larger deductibles, and more restrictive terms for every condo and HOA board in the state. But the market is not hopeless. Associations that understand what carriers want, present themselves as quality risks, and work with specialist agents can still find coverage. Here is what you need to know about why this happened, where things stand now, and what your board can do about it.

The Scale of the Crisis

To understand where Florida's condo association insurance market is in 2026, you need to understand how it got here. The numbers tell a stark story.

Between 2020 and 2024, more than a dozen property insurance carriers either left Florida entirely, stopped writing new condominium association policies, or placed their Florida condo books into runoff. These were not small, obscure companies. They included some of the largest writers of community association insurance in the state.

The impact was immediate and devastating. Associations that had been insured by the same carrier for a decade or more received nonrenewal notices. Boards that had budgeted based on modest annual premium increases were suddenly facing 100 to 300 percent rate hikes from replacement carriers, if they could find a replacement carrier at all. Some associations went months without coverage, operating in a state of uninsured exposure that would have been unthinkable just a few years earlier.

By the end of 2024, Citizens Property Insurance Corporation, Florida's state-backed insurer of last resort, had become one of the largest writers of community association insurance in the state, a role it was never designed to fill and one that carries significant risk for all Florida policyholders.

Why Carriers Are Leaving: The Five Drivers

The carrier exodus from Florida's condo market is not the result of any single factor. It is the convergence of five reinforcing problems that made the market unsustainable for many companies.

1. Hurricane Exposure and Catastrophic Losses

Florida is the most hurricane-exposed state in the nation, and condominium buildings, particularly high-rise coastal properties, represent concentrated risk. Hurricane Ian in 2022 caused an estimated $60 billion in insured losses statewide, making it one of the costliest natural disasters in American history. For carriers with significant Florida condo exposure, a single hurricane season can erase years of premium income.

The challenge is not just the frequency of hurricanes but the intensity. Climate science indicates that warmer ocean temperatures are contributing to the rapid intensification of storms, where a tropical storm can become a major hurricane in 24 to 48 hours. This makes risk modeling more difficult and increases the likelihood of catastrophic single-event losses.

2. Water Damage: The Silent Catastrophe

While hurricanes get the headlines, water damage has been the primary driver of day-to-day losses for Florida condo associations. Aging plumbing systems, deteriorating water heaters, HVAC condensate line failures, and unit-level plumbing failures generate a steady stream of claims that are individually modest but collectively devastating.

A single water claim in a high-rise condo can affect dozens of units as water travels downward through multiple floors. The average cost of a condo water damage claim in Florida has increased substantially as construction costs have risen. When an association has multiple water claims per year, year after year, the loss ratio becomes untenable for any carrier.

The problem is structural, both literally and figuratively. Many of Florida's condominium buildings were constructed during building booms in the 1970s, 1980s, and 2000s. The original plumbing systems in these buildings are reaching the end of their useful life simultaneously, creating a wave of failures that will continue for years.

3. Assignment of Benefits Abuse and Litigation Costs

For years, Florida's assignment of benefits (AOB) statute allowed policyholders to sign over their insurance benefits to contractors, who would then bill the carrier directly, often at inflated amounts. When carriers disputed these inflated claims, the one-way attorney fee provision in Florida law meant that if the contractor prevailed in court by even one dollar more than the carrier's offer, the carrier paid the contractor's attorney fees. The carrier's own attorney fees were never recoverable.

This created an industry of predatory claims. Roofing contractors would canvass neighborhoods after storms, soliciting AOB assignments and filing inflated claims. Water remediation companies would inflate repair costs knowing carriers would settle rather than face litigation with one-way fee exposure. By some estimates, Florida accounted for 8 percent of the nation's homeowners insurance claims but nearly 80 percent of its homeowners insurance lawsuits.

Legislative reforms in 2022 and 2023, including the elimination of one-way attorney fees and significant AOB restrictions, have begun to reduce litigation. However, the effects of years of excessive litigation are still working through the system, and carriers are cautious about returning to a market where they were burned so badly.

4. Reinsurance Cost Escalation

Insurance carriers buy their own insurance, called reinsurance, to protect against catastrophic losses. The cost of reinsurance for Florida hurricane exposure has skyrocketed. After Hurricane Ian, some Florida carriers saw their reinsurance costs increase by 50 to 100 percent in a single renewal cycle. This cost is passed directly through to policyholders.

The reinsurance market is global, and Florida must compete for reinsurance capacity with every other catastrophe-exposed region in the world. Global reinsurers have limited appetite for Florida risk, and that appetite was further reduced by the succession of costly hurricane seasons and the years of litigation-driven losses.

There are signs that reinsurance costs have moderated from their 2023 peaks. The 2024 and 2025 Atlantic hurricane seasons, while active, did not produce the catastrophic Florida landfalls that the market feared. This has allowed some stabilization in reinsurance pricing, but costs remain well above pre-2020 levels.

5. Construction Cost Inflation

The cost to repair and rebuild Florida condominium buildings has increased dramatically. Labor shortages, material cost increases, supply chain disruptions, and increased regulatory requirements have combined to push construction costs 30 to 50 percent higher than they were five years ago. This means every claim costs more to settle, replacement cost valuations are higher, and the overall exposure for carriers has increased even when the number of claims has not.

The Current Market Landscape: 2026

After several years of crisis, the Florida condo association insurance market in 2026 shows some signs of stabilization, though it remains fundamentally challenged.

What Has Improved

• Tort reform impact: The elimination of one-way attorney fees and AOB restrictions has reduced litigation filings by an estimated 40 to 60 percent. This is the single most significant positive development for the market.
• New market entrants: Several new carriers and managing general agents have entered the Florida market, attracted by higher premium rates and the improved legal environment. While none has the scale of the carriers that exited, they are adding capacity.
• Reinsurance moderation: Reinsurance costs have declined from their 2023 peaks, reducing the cost pressure on primary carriers.
• Citizens depopulation: Citizens has been actively transferring policies to private carriers through its depopulation program, which is a sign that private market capacity is increasing.

What Remains Challenging

• Pricing levels: Premiums remain two to three times higher than pre-2020 levels for most associations. The market has repriced Florida condo risk permanently higher.
• Underwriting stringency: Carriers are far more selective than they were five years ago. Building condition, claims history, reserve adequacy, and maintenance programs are all scrutinized heavily.
• Coastal exposure: Properties in hurricane-vulnerable coastal areas face the most limited options and highest prices.
• Older buildings: Associations with buildings constructed before 2002 (when the Florida Building Code was significantly strengthened) face particular difficulty obtaining coverage at reasonable prices.

What Your Board Can Do: A Practical Playbook

While your board cannot control the broader market, you can control how your association presents itself to carriers. In a market where underwriters are choosing which risks to write, you want to be the association they choose.

Become the Risk Carriers Want to Write

Think of your association as applying for coverage, not simply renewing it. Every underwriter who looks at your submission is evaluating whether your association is likely to generate claims that exceed the premium they charge. Your goal is to demonstrate that you are a well-run, well-maintained, and well-governed association that takes risk management seriously.

Invest in Water Damage Prevention

Because water damage is the leading driver of association claims, investing in prevention has the highest return on investment for insurance purposes. Specific measures that carriers value include:

• Unit-level water shut-off valve programs that allow automatic isolation of leaks
• Building-wide leak detection systems that alert management to water flow anomalies
• Regular plumbing inspections, particularly for buildings over 20 years old
• Proactive pipe replacement programs for buildings with polybutylene, cast iron, or other aging piping materials
• HVAC condensate line maintenance and monitoring
• Water heater age limits and replacement schedules

These investments cost money, but they are typically far less expensive than the premium increases and special assessments that result from a pattern of water claims.

Complete Inspections and Address Findings

Milestone inspections and SIRS reports are not just legal requirements; they are your association's résumé for insurance underwriters. A completed inspection with favorable results, or an inspection that identified issues that have been addressed, demonstrates proactive management. An association that has been avoiding or delaying inspections sends the opposite message.

Maintain Accurate Financials and Reserve Funding

Underwriters increasingly request financial statements and reserve study summaries as part of the application process. An association with fully funded reserves signals stability and the ability to absorb deductibles without financial distress. An association with chronically underfunded reserves suggests deferred maintenance, potential claims, and possible insolvency risk.

Work with a Specialist Agent: Do Not Go It Alone

The Florida condo association insurance market requires specialized knowledge and carrier relationships. A specialist agent will:

• Know which carriers are actively writing Florida condo business and their specific appetites
• Understand how to present your association's submission in the most favorable light
• Have access to both admitted carriers and the surplus lines (excess and surplus) market
• Start your renewal process 120 to 150 days before expiration, which is essential in this market
• Help you develop a multi-year strategy for improving your risk profile and reducing costs over time

Consider Alternative Risk Transfer Structures

For larger associations or groups of associations, alternative risk transfer structures may provide options that the traditional market does not. These can include:

• Higher deductible programs: Accepting higher deductibles in exchange for lower premiums, funded by reserves or a deductible buy-down policy
• Group purchasing programs: Multiple associations banding together to purchase coverage collectively, increasing their negotiating leverage with carriers
• Parametric insurance: Coverage that pays based on a triggering event (such as a hurricane of specified intensity at a specified location) rather than actual damage, which reduces claims adjustment disputes
• Captive insurance: For very large associations or management companies, forming a captive insurance company to retain a portion of the risk internally

The Outlook: Cautious Optimism

The Florida condo association insurance market in 2026 is better than it was in 2023 or 2024, but it remains fundamentally different from the pre-crisis market. Boards should plan for the following realities:

• Insurance will remain one of the largest line items in your operating budget for the foreseeable future
• Premium increases may moderate to single digits annually for well-run associations, but there is no path back to 2019 pricing
• A single active hurricane season could reverse the recent market improvements
• Carriers will continue to be highly selective, rewarding well-maintained and well-governed associations and penalizing those with deferred maintenance and poor claims histories
• The associations that invest in their buildings and their governance will be the ones that maintain the best insurance options and the strongest property values

The crisis has been painful, but it has also forced a long-overdue reckoning with the deferred maintenance, underfunded reserves, and inadequate governance that characterized too many Florida associations for too long. The associations that emerge from this period as well-maintained, well-insured, and well-governed communities will be stronger for it.

Frequently Asked Questions

Our carrier just sent a nonrenewal notice. What should we do first?

Contact your insurance agent immediately. If you do not have a specialist community association agent, find one now. Your agent needs the maximum possible time to market your association to replacement carriers. Gather your most recent milestone inspection report, SIRS, replacement cost appraisal, five-year claims history, current financial statements, and any documentation of capital improvements or maintenance programs. The more complete your submission package, the better your chances of finding competitive replacement coverage.

Should we switch to Citizens Property Insurance?

Citizens should be considered when private market options are exhausted or prohibitively expensive. Citizens provides essential coverage for associations that cannot otherwise obtain it. However, be aware of Citizens' coverage limits, the potential for surcharges after major hurricane seasons, and the fact that Citizens may transfer your policy to a private carrier through its depopulation program. Discuss the pros and cons with your agent based on your specific situation.

Can our association go without insurance temporarily?

This is extremely dangerous and potentially illegal. Florida statute requires condominium associations to maintain certain minimum coverages. Operating without insurance exposes the association to catastrophic financial liability from any insurable event, violates lender requirements which can trigger loan defaults, and exposes board members to personal liability. If you are having difficulty obtaining coverage, work with a specialist agent and consider Citizens as a bridge solution. Going bare should never be an option.