How does named storm insurance work for Florida apartment buildings?
Florida apartment owners face mandatory hurricane deductibles set by Florida Statute 627.701, with percentage deductibles of 2%, 5%, or 10% of the insured value and limited private market availability in coastal zones.
Florida law (Florida Statute 627.701) governs hurricane and named-storm deductibles for all commercial property policies in the state. Insurers must offer hurricane deductible options of $500, 2%, 5%, and 10% of the insured value. In practice, most apartment owners in coastal and central Florida carry 2% to 5% hurricane deductibles because the flat-dollar option is rarely available at competitive pricing for larger properties.
The statute defines the hurricane deductible trigger as commencing when the National Hurricane Center issues a hurricane watch or warning for any portion of Florida and ending 72 hours after the watch or warning is terminated. All windstorm losses occurring within this trigger window are subject to the hurricane deductible, and the deductible applies once per calendar year regardless of the number of storms.
Florida's insurance market for apartment buildings has contracted significantly in recent years, with several major carriers exiting the state following catastrophic hurricane losses. The state-created Citizens Property Insurance Corporation serves as the insurer of last resort but imposes surcharges on all Florida policyholders when its claims exceed its reserves. Apartment owners should work with brokers who access both the admitted market and the surplus lines market (regulated by the Florida Surplus Lines Service Office) to obtain the broadest available terms. The Florida Office of Insurance Regulation publishes quarterly market reports that track carrier availability by county.