Florida Condo Master Insurance Policy Crisis

When you say condo, I'm assuming building with multiple units, not an HOA with individual houses - unit owner insurance is typically walls-in, with the building being separately insured by the HOA.

What's the cost to rebuild from the ground? What happens if you haven't built up a reserve that covers it, and the building is destroyed? Rebuilding our building is well into six digits/unit, courtesy of a construction industry that's highly in demand - interest rates haven't made much of a dent here, and builders can also make a ton just building their own stuff for sale or rent.

Can all the owners afford the loss out-of-pocket?

What if there's a slip and fall or a murder lawsuit and you have to lawyer up?

Also, will any of the owners ever want to sell their units? Even in the unlikely event a prospect were willing to buy an uninsured unit, lenders won't lend to purchase in a building without insurance.

Will any of the board members be willing to serve without D&O covering them?

Florida has requirements for self-insurance. What is the cost of meeting them? (I know nothing about Florida law, I got this from looking on the Florida senate site https://www.flsenate.gov/laws/statutes/2012/718.111 Section 11 (a) 1.)

I think it's a pretty silly thing to do. But I suggest you start by talking with your co-owners and a competent attorney.

Correct. We are a multiple unit condo association located far inland away from flood and wind damage that other condos are facing.

Looking back over 40 or so years, our insurance claims are almost non-existent. It seems to me it just makes common sense to look at our own risk exposure and insure ourselves by taking those 500% increased payments and putting them into our own association account

I agree with all of NA1's comments. A few things about the reality of the situation, from where I am sitting:
I checked this at http://www.leg.state.fl.us/statutes/index.cfm?App_mode=display_statute&URL=0700-0799/0718/0718.html . Notably, this is going to supercede any requirement in the covenants to purchase insurance. The OP should thoroughly study what this statute section says and proceed to do more research from this.

-- Like NA1 posted, I too would put a lot of focus on whether unit owners' lenders would okay this. I think self-insurance meeting statutory requirements would in fact meet a requirement for insurance, but I would want to investigate further.

-- Viewing current reserves as a "self-insurance fund" likely violates fiduciary duty and state law. Study carefully FS 718, reserve sections.

-- Triple digit percentage increase in insurance premiums have come up a lot here in the last 18 months or so, especially in Florida, Texas or California.

-- Let's be real clear about why the legislature added this option (in the 1990s?): To keep the Florida economy from tanking. Their motivation was far from pure.

-- Like NA1 suggests, I too think "self-insurance" is oxymoronic. I would vote accordingly as a director.

-- If I were on a Florida HOA Board, and so tasked with either buying insurance or self-insuring, I would do all I could to buy insurance. If it means massive assessment increases, then do it. I feel fiduciary duty demands it.

-- If the deductible of purchased insurance is high, incorporate a line item in the reserve study for the deductible. This too is getting a lot of discussion here and in the media.