Each year, condominium associations work to obtain insurance at reasonable rates in an effort to comply with their statutory obligations to use “best efforts” to obtain insurance. In recent years, however, insurance rates have increased significantly, causing associations to question whether insurance is required at any cost. While best practice is, of course, for an association to maintain adequate insurance, an association may wonder whether “best efforts” means it must obtain insurance at any cost.
Assuming there are no provisions in an association’s governing documents requiring the association to maintain adequate insurance, an association’s insurance obligations are set forth in Section 718.111(11)(d), Florida Statues, which requires an association to use “its best efforts to obtain and maintain adequate property insurance to protect the association, the association property, the common elements, and the condominium property that must be insured by the association.” The question then becomes at what point a fiscal concern affects “best efforts.”
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