Condo Association Insurance

I own a townhome in Georgia. There are about 120 units which has both one level condos and two-level townhomes like mine. The owners pay the monthly condo association fees ($240). The association has insurance coverage from Community Association Underwriters of America, Inc (CAU). Recently there were severe thunderstorms and lightning in my area and my HVAC unit stopped working. The technician checked the unit and mentioned that the lightning has fried the electrical wires and he fixed them and replaced the capacitor.

Kindly let me know:
1. If I can file a claim (at least for reimbursement for the repair fees) with the condo association's insurance
2. When I asked the Condo Association's Manager he replied to my email as below:
"The association carries a $5,000 deductible. Therefore you should file a claim with your personal insurance carrier."
3. Generally who pays the deductible? The unit owner filing the claim or the association?

Thanks,
SP

You should be posing these questions to your agent and file a claim there - if any of this is the Association's responsibility, the insurance companies will dicker over the details. Personally, I think you'll be on the hook for this - the association insurance is generally designed to cover the common area, not items like air conditioners, furnaces, etc., which are homeowner responsibility (I also live in a townhouse community).

If you haven't already done so, you need to check your policy with your agent to ensure you're not over or underinsured, or that you're paying for components that are actually covered by the association. Generally, that would be the building structure of the townhouse, although you're still responsible for the doors and windows - at least that's how it works in my community.

As for the deductible, our association's policy is to charge that back to the homeowner if the damage to the common area was due to his/her negligence or abuse of the same. In some cases, the Association may choose to fix repairs itself if the cost is under the $5 deductible. Don't forget, every time you file a claim, the insurance company may be prompted to jack up the premium or drop the association altogether (that happened in my association).

If the A/C serves your unit only, the the repair will be the responsibility of the individual owner, not the HOA. Condo COULD be different if their is central air, but generally, each unit has their own unit. Your CCRs will also spell this out.

Sekar P3 Georgia

If you own a condo rather than some other form of shared ownership take a look at Georgia's
2010 Georgia Code
TITLE 44 - PROPERTY
CHAPTER 3 - REGULATION OF SPECIALIZED LAND TRANSACTIONS
ARTICLE 3 - CONDOMINIUMS
§ 44-3-107 - Insurance coverage
O.C.G.A. 44-3-107 (2010)
44-3-107. Insurance coverage

at http://law.justia.com/codes/georgia/2010/title-44/chapter-3/article-3/44-3-107/

That requires a Georgia condo corp to retain master policy coverage that includes
....Such insurance shall cover the following items with respect to each condominium unit regardless of who is responsible for maintaining them under the condominium instruments:

(A) The HVAC system serving the condominium unit;

The questions usually are :

Is some loss an insurable loss ?

If so, whose loss ?

Does a jurisdiction - like mine - empower condo By-laws that could be passed to slope-shoulder everything within a by-lawed standard unit boundary onto the poor schmuck who owns that unit except blameworthy damage by an act or omission of the condo corporation.

Lightning may have been an insured peril covered by the master insurance policy.

But how does your by-law if any address that insurance deductible ? Some deductibles here are hitting $40 K $50 K

What else did the property manager tell you ?

Thanks
and Sekar :

Bear in mind that 'insurable loss' is not easy to persuade for replacing largely due to end-of-life component failure, nor discretionary human choices omitting to prevent otherwise preventable insurable loss.

Insurers may ( ? ) be only too eager to deny coverage after loss if the component was part of an inadequately grounded protection. eg units being fried almost every lightning storm ?

One highrise condo corporation failed to get an insurer remedy a $ multi million design defect that caused premature system failure. Are insurance adjusters Nature's way of justifying lawyers or kicking us all in the pants to incorporate every prudent system protection ?

Not sure if it IS a 'good find' but at least it is a FIND for Sekar.

SekarP9 reports about his lowrise that : “Recently there were severe thunderstorms and lightning in my area and MY HVAC unit stopped working. The technician . . . "

It would have been easier if Sekar's lightning-damaged component had been his dishwasher or new TV.

The extremes of cold in my jurisdiction (and Directors' cost aversion) may be among reasons why unit specific HVACs are not uncommon even in highrises here. Guessing Georgia's legislature (like mine) fears bigtime the basic units of housing stock being uninsured or under-insured by unit owners . . . then suffering insurable loss . . then left to deteriorate . . .

Since May 2001, however condo law here has allowed condo corporations to by-law their way out of the master policy insurance deductible including unit damage except insurable loss caused by their own blameworthiness. The claim has been that condo owners can buy unit-specific coverage for that transferred deductible cheaper individually than as a group.

Many deductible-shifting bylaws have resultantly gotten passed ( with maybe shaky understanding by owners & professionals alike ). Bottom line here anyway is that the deductible shifting bylaws slope-shoulder the master policy deductibles as much as humanly possible onto the individual unit owner. Pity a unit owner uninsured for a $40 K or $50 K master policy deductible.

So in my jurisdiction Sekar - under such deductible-shifting bylaw - may now have to suck up the master policy deductible ( if his damaged unit's HVAC actually is an insurable loss under the master policy ). Is Georgia the same ?