Florida Community Association Manager Practice Exam

How many communities must an association have to create a self-insurance fund?

1. 1 or more communities

2. 2 or more communities

3. 3 or more communities

4. 4 or more communities

The correct answer is: 3 or more communities

In Florida, the requirement for creating a self-insurance fund states that an association must have three or more communities. This regulation is designed to ensure that the risk pool is sufficiently large to absorb potential losses. By requiring multiple communities, this approach helps to spread the risk and supports the financial stability of the self-insurance fund. Self-insurance can lead to cost savings for associations, as they can manage claims internally rather than relying on external insurance providers. However, having a minimum number of communities enhances the fund's resilience and provides a better risk management structure. Therefore, the correct answer reflects the legal requirement that is intended to bolster the financial soundness of self-insured associations. The other options suggest fewer communities than the established requirement, which would not meet the necessary standards for creating a self-insurance fund as mandated by Florida law.