The Most Costly Insurance Mistakes Florida Condo Owners Make — And How to Avoid Them

Florida condo insurance is not forgiving. One missed endorsement, one misunderstood master policy provision, or one unchecked assumption can turn a manageable loss into a six-figure financial problem.

What makes condo insurance especially tricky in Florida is that many of the biggest mistakes are not obvious. Condo owners often believe they are insured correctly—until a hurricane hits, water spreads to another unit, or the association issues a surprise special assessment.

In Week 11 of the Florida Condo Insurance Education Series, first, we are breaking down the most common and costly insurance mistakes Florida condo owners make. Next, we explain why these mistakes happen in the first place. Additionally, we look at how these oversights can quietly increase financial risk. Meanwhile, many owners assume their coverage is sufficient when it is not. As a result, small gaps can turn into major out of pocket expenses. Finally, we outline what you can do now to avoid learning these lessons the hard way.

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Mistake #1: Assuming the Association’s Insurance Covers the Inside of Your Unit

This is the most common condo insurance misunderstanding in Florida.

Many owners believe:

• “The association has insurance, so my unit is covered.”
• “My HOA fees include insurance for everything.”
• “If there’s damage, the association will handle it.”

Reality

The association’s master policy typically covers:

• The building structure
• Roof
• Exterior walls
• Common areas

You are responsible for:

• Flooring
• Cabinets
• Countertops
• Drywall and paint
• Fixtures
• Appliances
• Interior upgrades

If your HO-6 interior coverage is too low—or missing altogether—you will pay out of pocket.

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Mistake #2: Carrying the Default HO-6 Interior Coverage Limit

Many HO-6 policies are issued with default interior building limits like:

• $25,000
• $30,000
• $40,000

In Florida, these amounts are rarely sufficient.

Why This Becomes a Problem

Replacing:

• Tile or wood flooring
• Kitchen cabinets
• Countertops
• Bathrooms
• Drywall after water damage

can easily exceed $80,000–$150,000, even in a modest condo.

The Fix

Your interior building coverage should reflect replacement cost, not the minimum required to bind a policy.

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Mistake #3: Ignoring Loss Assessment Exposure

Loss assessments are one of the most financially painful surprises for Florida condo owners.

Associations issue assessments to cover:

• Hurricane deductibles
• Fire or water damage to common areas
• Liability claims
• Structural repairs
• Master policy shortfalls

Most HO-6 policies include only $1,000–$2,000 of loss assessment coverage by default.

In Florida, assessments often range from:

• $5,000
• $10,000
• $25,000+ per unit

The Fix

Most Florida condo owners should carry:

• $25,000 minimum
• $50,000 for most buildings
• $100,000 for coastal or high-rise condos

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Mistake #4: Not Understanding Who Pays for Water Damage

Water damage is the #1 condo claim in Florida—and also the most misunderstood.

Common (incorrect) assumptions:

• “If the leak came from another unit, they pay.”
• “The association will fix everything.”
• “All water damage is covered.”

Reality

• Your HO-6 covers damage inside your unit, even if the leak started elsewhere.
• Slow leaks and maintenance issues are often excluded.
• Mold coverage is limited unless increased by endorsement.

Waiting for someone else to “accept responsibility” often makes the damage worse—and more expensive.

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Mistake #5: Underestimating Hurricane and Wind Deductibles

Florida condo owners are exposed to storm deductibles in two places:

1. The association’s master policy
2. Their individual HO-6 policy

This can result in:

• A special assessment for the association deductible
• A separate HO-6 deductible for interior damage

Owners are often shocked by the size of hurricane deductibles, which are percentage-based and tied to insured value.

The Fix

Understand:

• The association’s hurricane deductible
• Your HO-6 wind/hurricane deductible
• How loss assessment coverage fits into the picture

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Mistake #6: Not Updating Coverage After Renovations

Renovations increase your insurance responsibility.

If you upgrade:

• Flooring
• Kitchens
• Bathrooms
• Lighting
• Built-ins

but fail to update your HO-6 limits, you may be underinsured immediately.

Insurance does not automatically increase when you remodel.

The Fix

Any renovation should trigger an insurance review and updated interior building limits.

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Mistake #7: Renting the Condo Without Adjusting Insurance

Many Florida condo owners rent their units:

• Seasonally
• Annually
• Through Airbnb or VRBO

Standard HO-6 policies are designed for owner-occupied use, not rental activity.

Common results:

• Denied liability claims
• No coverage for guest-caused damage
• No coverage for lost rental income

The Fix

Match the policy to the use:

• HO-6 (owner-occupied)
• DP-3 (long-term rental)
• Short-term rental policy (Airbnb/VRBO)

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Mistake #8: Not Carrying Enough Liability Coverage

Many HO-6 policies default to $100,000 in liability coverage.

In Florida condos, this is often inadequate due to:

• Slip-and-fall claims
• Water damage spreading to other units
• Dog bite claims
• Contractor injuries

Legal costs alone can exceed low policy limits.

The Fix

• $300,000 minimum liability
• $500,000 preferred
• Consider a $1M umbrella policy

Umbrella coverage is often one of the best values in personal insurance.

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Mistake #9: Overlooking Flood Insurance

Flood damage is never covered under an HO-6 policy.

Many condo owners believe:

• “The building has flood insurance, so I’m covered.”
• “I’m not in a flood zone.”

Reality

• The association’s flood policy may not cover your interior.
• Flooding can occur from storm surge, heavy rain, or drainage failure.
• Ground-level and first-floor units are especially exposed.

The Fix

Evaluate individual flood insurance options, even if the association carries a flood policy.

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Mistake #10: Not Reading Citizens Insurance Notices Carefully

If your condo or association is insured through Citizens, you may receive:

• Depopulation (take-out) notices
• Coverage changes
• Deductible updates

Ignoring these notices can result in:

• Automatic policy transfers
• Coverage gaps
• Unexpected premium changes

The Fix

Every Citizens notice should be reviewed with an experienced agent before deadlines pass.

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Mistake #11: Not Reviewing the Policy Annually

Florida insurance changes constantly:

• Carriers exit the market
• Endorsements change
• Deductibles increase
• Master policies change

A policy that was “fine last year” may be inadequate today.

The Fix

Annual reviews are essential—especially before hurricane season.

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Mistake #12: Working With an Agent Who Doesn’t Specialize in Condos

Condo insurance is not the same as homeowners insurance.

Mistakes often happen when:

• The master policy is never reviewed
• Bylaws are ignored
• Endorsements aren’t discussed
• Loss assessment exposure isn’t addressed

The Fix

Work with an agent who:

• Reviews master policies
• Understands Florida condo law
• Structures HO-6 coverage intentionally

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A Quick Self-Audit for Florida Condo Owners

Ask yourself:

• Do I know what my association’s policy covers?
• Would my HO-6 rebuild my interior today?
• Could I afford a $10,000–$25,000 assessment?
• Would my policy respond if water spread to another unit?
• Am I insured correctly if I rent the unit?
• Do I understand my hurricane deductibles?

If any of these questions cause uncertainty, there may be a gap worth addressing.

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Final Thoughts: Most Condo Insurance Mistakes Are Preventable

Very few Florida condo owners make insurance mistakes intentionally. Most issues arise from assumptions, outdated coverage, or a lack of clear guidance.

The good news?
Every mistake outlined in this article is preventable with proper planning.

Florida condo owners who take a proactive approach:

• Avoid denied claims
• Reduce out-of-pocket costs
• Protect their investments
• Sleep better during storm season

Next week, in Week 12, we’ll wrap up this series with The Ultimate Florida Condo Insurance Checklist—a step-by-step annual review guide every condo owner can use to stay protected year after year.