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A pretty solid article in the WSJ Journal about the Florida Miami Condo Collapse, worth the read if you are in the industry and have access to it.
Big surprise: Not Enought Insurance [or the correct type of insurance] and the attorneys are stepping in. Not entirely certain about a few of the comments/opinions though. My bold highlights.
"Plaintiffs’ lawyers have filed some two dozen lawsuits following the collapse of the Champlain Towers South condo tower last month, seeking payouts for the 98 deaths and destruction of 136 apartments it caused. The lawyers say it would take $1 billion to compensate everyone fairly.
But the pool of money currently available for the Miami-area disaster is far smaller—some $50 million from insurance policies in place for the condo association, according to attorneys and court filings. The shortfall is so significant that the potential settlement might not even be enough to cover some residents for the value of their lost units, said Brad Sohn, one of the plaintiffs attorneys appointed by the court to lead the litigation.
Already, the limited pool of funds is pitting Champlain Tower residents who suffered only property damage against those who lost loved ones or suffered injuries that could have long-term consequences.
...
The Champlain Towers South litigation is constrained by a conservative property-insurance policy and a push by the judge to resolve the lawsuits on an accelerated timeline. The main defendant isn’t a multinational corporation or a wealthy developer but the condo board, a nonprofit with limited financial resources.
...
The Florida lawsuits allege that the condo board failed to protect the building’s residents by not making vital repairs and monitoring the Surfside, Fla., building for signs of disrepair that led to the collapse. Most of the lawsuits are expected to be consolidated in a class-action suit.
...
The $50 million pool of potential compensation is composed of a $31.4 million property policy covering the building, and the condo association’s $18 million in liability coverage.
....
One problem, according to insurance-industry executives, is that while the building is insured in line with many other South Florida condo buildings, the policy limits are essentially designed to cover damage from, for example, a major hurricane—not a collapse requiring total reconstruction. So, proceeds could fall far short of what is actually needed to rebuild, or, if distributed across owners, what people would need to buy a unit elsewhere, the executives said.
Great American Insurance Co., part of American Financial Group Inc., issued the building policy in December and has pledged to pay the full policy limits, a company spokeswoman said.
Low property-insurance policy limits aren’t unusual in condos because they cost owners less in premiums, said Howard Sharfman, Delray Beach-based senior managing director at broker and consultant NFP Insurance Solutions, which works with many condo associations in Florida.
Based on the current cost of construction in South Florida, “the coverage seems inconsistent with the cost to clear the site and rebuild the structures,” he said.
...
Residents who have homeowners insurance will be able to draw on their own policies to help cover the loss of value in their units and current living expenses. But Michael Clarkson, agency principal for Hilb Group of Florida in Clearwater and a longtime specialist in condo-association coverage, said many South Florida condo owners don’t own such policies because many don’t have mortgages that would require the protection."
Thoughts?
Big surprise: Not Enought Insurance [or the correct type of insurance] and the attorneys are stepping in. Not entirely certain about a few of the comments/opinions though. My bold highlights.
"Plaintiffs’ lawyers have filed some two dozen lawsuits following the collapse of the Champlain Towers South condo tower last month, seeking payouts for the 98 deaths and destruction of 136 apartments it caused. The lawyers say it would take $1 billion to compensate everyone fairly.
But the pool of money currently available for the Miami-area disaster is far smaller—some $50 million from insurance policies in place for the condo association, according to attorneys and court filings. The shortfall is so significant that the potential settlement might not even be enough to cover some residents for the value of their lost units, said Brad Sohn, one of the plaintiffs attorneys appointed by the court to lead the litigation.
Already, the limited pool of funds is pitting Champlain Tower residents who suffered only property damage against those who lost loved ones or suffered injuries that could have long-term consequences.
...
The Champlain Towers South litigation is constrained by a conservative property-insurance policy and a push by the judge to resolve the lawsuits on an accelerated timeline. The main defendant isn’t a multinational corporation or a wealthy developer but the condo board, a nonprofit with limited financial resources.
...
The Florida lawsuits allege that the condo board failed to protect the building’s residents by not making vital repairs and monitoring the Surfside, Fla., building for signs of disrepair that led to the collapse. Most of the lawsuits are expected to be consolidated in a class-action suit.
...
The $50 million pool of potential compensation is composed of a $31.4 million property policy covering the building, and the condo association’s $18 million in liability coverage.
....
One problem, according to insurance-industry executives, is that while the building is insured in line with many other South Florida condo buildings, the policy limits are essentially designed to cover damage from, for example, a major hurricane—not a collapse requiring total reconstruction. So, proceeds could fall far short of what is actually needed to rebuild, or, if distributed across owners, what people would need to buy a unit elsewhere, the executives said.
Great American Insurance Co., part of American Financial Group Inc., issued the building policy in December and has pledged to pay the full policy limits, a company spokeswoman said.
Low property-insurance policy limits aren’t unusual in condos because they cost owners less in premiums, said Howard Sharfman, Delray Beach-based senior managing director at broker and consultant NFP Insurance Solutions, which works with many condo associations in Florida.
Based on the current cost of construction in South Florida, “the coverage seems inconsistent with the cost to clear the site and rebuild the structures,” he said.
...
Residents who have homeowners insurance will be able to draw on their own policies to help cover the loss of value in their units and current living expenses. But Michael Clarkson, agency principal for Hilb Group of Florida in Clearwater and a longtime specialist in condo-association coverage, said many South Florida condo owners don’t own such policies because many don’t have mortgages that would require the protection."
Thoughts?