Vero Beach City Council reviews options after airport tenants face rising windstorm insurance costs

Vero Beach City Council held a workshop on airport tenant insurance where staff, insurance agents and tenant representatives described recent, large increases in windstorm premiums and discussed several possible responses, including keeping the current lease requirements, offering new land-only leases that would not revert buildings to the city, allowing higher deductibles, and creating escrow or demo-insurance mechanisms.

The discussion matters because many airport tenants operate older metal buildings that insurers increasingly decline to cover for windstorm or that carry much higher premiums and large deductibles; council members said unresolved insurance gaps could expose the city to unrecoverable costs if damaged buildings revert to the city or sit derelict.

City staff described three principal options under consideration: 1) retain the current lease language and insurance requirements (Attachment B) that generally require tenants to carry windstorm insurance and provide for building reversion to the city at lease end; 2) offer a new land-only lease in which the lessee would retain ownership of buildings for the term and would not have buildings revert to the city at renewal (market rent to be set by appraisal, adjusted by CPI); or 3) permit case‑by‑case departures supported by measures such as escrow accounts, personal guarantees or demolition insurance to ensure the site could be redeveloped if a lessee chose not to repair after a loss. Staff also discussed the industry option known as a “buyback” policy that covers part of a higher deductible for an additional…