HOA Insurance Claim

Started by MaureenM1 • 78 replies • 7450 views

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MaureenM1 (PA)
Posts: 344

Posted:

One of our homeowners rented his townhome (in PA) for a year. Not even two weeks after they moved out and the unit was empty and up for sale, the refridgerator hose was leaking and caused a flood in the home that caused damage to the first floor and basement.

The Board has been notified by the owner of the unit that his homeowners insurance wants him to put a claim in to the Association's insurance and wants our permission.

When I spoke to our insurance they said that we are the Primary insurance. The agent suggested we contact our board attorney.

The board feels that this was negligence on the absentee landlord's part (who lives in Florida) and that the water should have been turned off in the unit and we should not allow a claim..

Has anyone else experienced this and has any advise?

PitA
Posts: 1,416

Posted:

you have no power to 'deny a claim'

you have power to not submit a claim

should the HO who's home was damaged submit a claim to the HOA's insurer it will be said insurer who accepts or denies said claim

stay out of the fray (unless some common elements were damaged)

let the pros work for their money

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Don't even go to the attorney on this one and waste your money. The person wants to put a claim in with the HOA, they have to go through their insurance to do so. Their insurance is responsible for contacting the HOA's insurance company if they have a real claim.

However, it sounds like this person had no renter's insurance and can't cough up the money to their landlord. They are going to have to lose their damage deposit if they had one to the landlord. Which could be a large sum. Unless your HOA owns that property, your insurance doesn't cover it. So I'd tell them to go to their landlord or their insurance company. No need to knock on the HOA's door. Plus as a renter they are NOT even a member of the HOA!

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By PitA on 07/31/2015 2:51 PM
you have no power to 'deny a claim'

you have power to not submit a claim

should the HO who's home was damaged submit a claim to the HOA's insurer it will be said insurer who accepts or denies said claim

stay out of the fray (unless some common elements were damaged)

let the pros work for their money

I agree.

MaureenM1 (PA)
Posts: 344

Posted:

The renter moved out weeks ago and most probably already has his security deposit back. It is the homeowner that wants to put a claim in on the Association's insurance and not his personal Homeowner's insurance.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Maureen

The advice is still the same.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Sorry but he still has to go through his own personal insurance if he has some. Plus if he did make a claim with the HOA's insurance guess who's insurance they will be contacting? His... Insurance is going to get their money one way or another... Plus it's the entire HOA that would have to pay the HOA's deductible. Which isn't very fair to the rest of the members is it to use their money for his issue? Especially since the HOA doesn't have a thing to do with his house.

This is an individual owned home correct and not a condo situation? Even if a condo, you are responsible for whatever happens interiorly. Unless it's something the HOA does indeed own and responsible for. Which would be defined in the rules.

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By MaureenM1 on 07/31/2015 2:46 PM
One of our homeowners rented his townhome (in PA) for a year. Not even two weeks after they moved out and the unit was empty and up for sale, the refridgerator hose was leaking and caused a flood in the home that caused damage to the first floor and basement.

The Board has been notified by the owner of the unit that his homeowners insurance wants him to put a claim in to the Association's insurance and wants our permission.

When I spoke to our insurance they said that we are the Primary insurance. The agent suggested we contact our board attorney.

The board feels that this was negligence on the absentee landlord's part (who lives in Florida) and that the water should have been turned off in the unit and we should not allow a claim..

Has anyone else experienced this and has any advise?

I think you were able to answer your own question. The association's insurance company suggested you contact the association attorney. I believe that would be a great place to start, as none of us here have access to your CCRs or insurance policy.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I say inform the owner that you do not see this as a BOD issue. You see it as an issue between him and his insurance company, and the BOD does not intend to take action. Then wait for the other shoe to fall before doing anything.

LarryB13 (Arizona)
Posts: 4,099

Posted:

It seems like there was a thread on here a few months ago regarding insurance claims in condos. My feeble mind remembers it as being in Pennsylvania. What I recall (and this could be very wrong) was that state law required that all claims for damage to the structure be filed against the condo's policy. Only the owner's personal property is covered by his insurance.

Does anyone else recall that thread?

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By JohnC46 on 07/31/2015 4:01 PM
I say inform the owner that you do not see this as a BOD issue. You see it as an issue between him and his insurance company, and the BOD does not intend to take action. Then wait for the other shoe to fall before doing anything.

Maureen

If your insurance company is telling you to contact the attorney, this is one time I would not be taking this site's advise.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

All

Not to split hairs but when most say townhouses they mean multi floor units, side by side as in not a unit above, below, behind, in front of, etc. Picture side by side "brownstones" in older cities. Such might be covered under Condo Laws in some states but there is quite a bit of difference in responsibility.

Usually in this situation (townhouses) the only insurance the association has is on the exterior of the building and common elements like walls of side by side units plus the common roof. If such then the owner is responsible any damage to their unit from their unit (such as the OP posted), not the association.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By JohnC46 on 07/31/2015 4:34 PM
All

Not to split hairs but when most say townhouses they mean multi floor units, side by side as in not a unit above, below, behind, in front of, etc. Picture side by side "brownstones" in older cities. Such might be covered under Condo Laws in some states but there is quite a bit of difference in responsibility.

Usually in this situation (townhouses) the only insurance the association has is on the exterior of the building and common elements like walls of side by side units plus the common roof. If such then the owner is responsible any damage to their unit from their unit (such as the OP posted), not the association.

Please refer to PA Condo Act

LarryB13 (Arizona)
Posts: 4,099

Posted:

The previous thread that dealt with a Pennsylvania condo insurance claim is:
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/195179/view/topic/Default.aspx

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Richard

Unless I am mistaken, Maureen's association has not contacted nor been contacted by a lawyer nor an insurance company. They have only been verbally contacted by the owner with his "belief/wish/hope" that the association insurance company should cover this.

Maureen. Am I wrong?

MaureenM1 (PA)
Posts: 344

Posted:

no, you are correct.

MaureenM1 (PA)
Posts: 344

Posted:

thank you.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By JohnC46 on 07/31/2015 4:44 PM
Richard

Unless I am mistaken, Maureen's association has not contacted nor been contacted by a lawyer nor an insurance company. They have only been verbally contacted by the owner with his "belief/wish/hope" that the association insurance company should cover this.

Maureen. Am I wrong?

Guess I misread.

"When I spoke to our insurance they said that we are the Primary insurance. The agent suggested we contact our board attorney. ".

BobD4 (up north)
Posts: 1,002

Posted:

MaureenM1 (PA):

Do the ‘factuals’ indicate that the loss is an insurable loss under somebody's policy ? ( as opposed eg to directly repair replace a normal, clearly overdue repair /replacement for an item that has failed )

If so, factually whose insurable loss ? eg if the jurisdiction requires master policy to insure standard unit below upgrades & personal contents ?

If a master policy is triggerable, can the master policy deductibles be slope-shouldered away from being a general expense item born by all owners ? Tempting it may be to try to label something as ‘owner negligence’, a first time pipe rupture may not be negligence in a hose looking normal and within its design age. Board may not have a clue about ‘negligence’ under your state’s legal environment and may have following voodoo practices for years.

Does the jurisdiction empower the condo corp to purport to totally withhold making a claim under the master policy without instead funding the loss itself ?

BobD4 (up north)
Posts: 1,002

Posted:

MaureenM1 (PA):

I should have added that those (preceding) four questions to be helpfully considered upfront, may not be the only nor best way for a manager or Director to get a grip on what upfront sometimes looks like a Rubik's cube.

But they may be part of one way to make it easier.

They may be helped by some professional skillset & famiiarity with both state law and governance documents like an up-to-date insurance deductibles by-law and a standard unit by-law. One sees the critical handiness of an adequate Declaration description, or standard unit by-lawed definition in the absence of such being current and well worded.

Don't bother literally answering them here. Good luck with the outcome.

KerryL1 (California)
Posts: 14,550

Posted:

Can't speak for other condos in other states, but in our high rise, any damage caused by something breaking in an owner's unit (e.g. a toilet seal, washing machine hose, ice maker, heat pump hose, etc., etc.,) is that Owner's responsibility.

Why in the world should the HOA pay for any leak/flood that is caused by an owner's personal & separate property (which is how all of the above is defined in our CC&Rs)? I don't think we are rare.

BobD4 (up north)
Posts: 1,002

Posted:

KerryL1 Cal: :" Can't speak for other condos in other states, but in our high rise, any damage caused by something breaking in an owner's unit (e.g. a toilet seal, washing machine hose, ice maker, heat pump hose, etc., etc.,) is that Owner's responsibility.

Why in the world should the HOA pay for any leak/flood that is caused by an owner's personal & separate property (which is how all of the above is defined in our CC&Rs)? I don't think we are rare."

Cannot say how common. But a jurisdiction might - as in ours - expressly legislate that condo master insurance policies lawfully must expressly cover a condominium standard unit.( but not upgrades nor contents ). This long predates the US housing /mortgaging crises.

One explanation is a well-supported legislative fear that individual owners may not maintain coverage for the standard unit at all. Challenge can be how to define "standard unit" below upgrades if not readily discernable in Declaration/description or may be not up to date with current realities.

Standard unit by-laws ( where legislated possible ) may allow a community to redefine "standard unit", resolving ambiguities/ lessening the overall exposure of the master policy. Double edged sword is accompanying ( legislatively empowered ) insurance deductible by-law that may slope-shoulder master policy deductibles beyond merely common element failures/ incl. beyond negligence of the condo corporation.

Is it a good idea to force vertical columns of 3rd party victims to suck up 'stoppered bathtub overflow' damage to their standard unit after some jerk 3 or 5 stories above allows overflow for the 3rd time in 5 years ?

The jerk may not have insurance at all, but the legislation empowers totally innocent victims to at least insure themselves against the downloaded master deductible for damage to their own standard unit ( without held voided by "contribution").

KerryL1 (California)
Posts: 14,550

Posted:

Your reply, BobD, is exactly why I included so many caveats and made it clear our policy may not apply to all condos in all jurisdictions. I do not know Maureen's governing docs nor her state's laws.

Apparently we have few or no "jerks" as I've been on the board 8-1/2 years and there never has been a "repeat offender" viz. leaks.

Our CC&Rs "require" that all Owners have insurance to protect their neighbors from damage, loss of use, etc., & our common areas. The common name for such a policy is an HO-6. On advice of our GC, , however, our HOA does not keep track to see that every owner has it & keeps it. I cannot remember the reason, won't look it up, but it made perfect sense. Of our 196 high rise residential units, we have maybe 10-12 floods a year from individual units and a handful from common area issues.

Many leaks/floods big & small occur in high rises. Last week, a lady decided to wash some cushions in her washer, which, of course overflowed. Got a couple of units & a hallways wet.

The risk of water intrusion is a trade off we make in order to engage in our urban style of life.

BobD4 (up north)
Posts: 1,002

Posted:

Kerry Li Cal

1 -"however, our HOA does not keep track to see that every owner has ( individual unit coverage ) it & keeps it. I cannot remember the reason, won't look it up, but it made perfect sense."

In a non commercial setting, it makes sense to me that the management burden would be far
beyond whatever the benefits of trying to track coverage. Could a mere Rule reasonably require such confirmations or cite the corporation as "entitled to notice" ? And if the coverage lapses what then to do ? Lots of work to set up & operate, as I found out , ans a sink hole for labour.

2 - "Of our 196 high rise residential units, we have maybe 10-12 floods a year from individual units and a handful from common area issues. "

Wonder how many were the same unit ? Lots to be said for a Declaration permitting 'repeat flooders' without any other due process, to be hurled from the top of the building.

KerryL1 (California)
Posts: 14,550

Posted:

As I wrote above, BobD, we have had NO repeat offenders in the 8-1/2 years I've been on the board. While we directors are not actively involved at all in remediated floods, we get reports about them from our PM.

Yes, we directors had been concerned about the PM's labor involved in tracking all 196 units' insurance. But the attorney's reason was different than that, of course.

BobD4 (up north)
Posts: 1,002

Posted:

KerryL1 cal Yes, we directors had been concerned about the PM's labor involved in tracking all 196 units' insurance. But the attorney's reason was different than that, of course."

Just for starters without an express legislative power there is a limited scope to insure anyone else's property ( or life) , in this case the corporation having no ownership of each owner's unit. Not easy just enforcing a contracted 3rd party right to notice ( of lapse or termination ) within someone else's policy.

MaureenM1 (PA)
Posts: 344

Posted:

could you put this is "lay" person terms please!!!

BobD4 (up north)
Posts: 1,002

Posted:

Maureen M1 PA

The approach I suggested above July 31 and Aug 1/15 is just one way to try to "put some handles" on something lots of managers & Directors don't understand, or unfortunately understand only too well.

That approach looks for the easiest way to toss the loss onto anyone else legally. ( or at least avoid it hitting you unnecessarily ). You may best want to ask your lawyer or competent condo insurance specialist.

NancyG3 (North Carolina)
Posts: 342

Posted:

Maureen - "The Board has been notified by the owner of the unit that his homeowners insurance wants him to put a claim in to the Association's insurance and wants our permission." He doesn't need the Assn permission to put a claim in. He can report it himself, if he knows the Assn's insurance company. Since the Board has been put on notice that he intends to file a claim the Board should report this to the HOA insurance agent first. Then tell the owner that it has been reported to the HOA insurnace company and you suggest he report it to his company and let the 2 company's handle. In case it comes to the owner suing the Assn. the insurance company will have all the info and will assign an attorney to handle at no cost to Assn. Tell the owner that a cliam has been submitted to the Assn insurance and he should report this to his insurance company and let them handle. The insurance company has the insurance policy information and know how to interpret the coverages. Get out of the middle and let the insurance company's handle. Hope this helps.

N

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Maureen

My original advice was and remains:

I say inform the owner that you do not see this as a BOD issue. You see it as an issue between him and his insurance company, and the BOD does not intend to take action. Then wait for the other shoe to fall before doing anything.

NancyG3 (North Carolina)
Posts: 342

Posted:

Melissa - PitA wrote:

"you have no power to 'deny a claim' - This is very true.

you have power to not submit a claim - This is true but not good advise. Your Board has been put on notice that he would like to file a claim to the HOA insurance company. It would be better (as far as the insurance company is concerned) that the Board put the claim in first and let them investigate. They have all the insurance coverages and knowledge on how to handle this claim. It could be possible that there is more involved than you know. Let the insurance company investigate and if you are not liable they will deny the claim. If the homeowner decides to sue the HOA, the insurance company would assign a lawyer to handle. This would be no cost to the HOA. It means more that a denial comes from an insurance company than an insured. Hope this helps.

Nancy

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By NancyG3 on 08/03/2015 4:50 PM
Melissa - PitA wrote:

"you have no power to 'deny a claim' - This is very true.

you have power to not submit a claim - This is true but not good advise. Your Board has been put on notice that he would like to file a claim to the HOA insurance company. It would be better (as far as the insurance company is concerned) that the Board put the claim in first and let them investigate. They have all the insurance coverages and knowledge on how to handle this claim. It could be possible that there is more involved than you know. Let the insurance company investigate and if you are not liable they will deny the claim. If the homeowner decides to sue the HOA, the insurance company would assign a lawyer to handle. This would be no cost to the HOA. It means more that a denial comes from an insurance company than an insured. Hope this helps.

Nancy

Nancy

Where we disagree is I believe the owner has done nothing but blow smoke at the association and is hoping for answers. I say until there is some "formal/legal" action from the owner, then the BOD should pass the buck back to the owner.

Have you ever lived in a townhouse where damage to your unit (and your unit alone) was caused by you?

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By JohnC46 on 08/03/2015 5:02 PM

I know of an association where the owners had a provision put into the CCRs that ANY water damage to a unit was to be covered by the HOA subject to the HOA insurance deductible. People put too much toilet paper into toilet and it overflowed, causing $20,000 damage. The HOA changed deductible to $10,000. Many claims were filed.

As I pointed out earlier, someone needs to look at PA Condo law.

This was from the OP's first post, " When I spoke to our insurance they said that we are the Primary insurance. The agent suggested we contact our board attorney."

BobD4 (up north)
Posts: 1,002

Posted:

Between jurisdictions, there may be a range of different answers to the question whether or not - after a standard unit's suffering insurable loss where required by law to be covered under the master policy - a condo/shared ownership assn has jurisdiction to deny submitting a (credible) claim.

The limited judicial comment on this issue over the last 15 years in mine, has varied from :

"There is NO authority to refuse claiming the unit damage under the master policy "

to

"IF you purport to have authority to refuse claiming for unit damage under the master policy ( eg insurable loss would be less than the deductible ), then you the condo corp must suck up the owner's loss." This wasn't a bad idea until master policy deductibles started hitting $ 25K -$ 50K per event.

NancyG3 (North Carolina)
Posts: 342

Posted:

Richard - "This was from the OP's first post, " When I spoke to our insurance they said that we are the Primary insurance. The agent suggested we contact our board attorney."

The person to look at PA Condo Law would be the insurance company. I missed the first part where it said the insurance said to contact the board attorney. I would like to know why the insurance co said this. I'm thinking their agent made this statement not the insurance company. By them saying this they have denied the claim. A denial should come in writing from the insurance company. I think there is more involved in this and it should be handled by the insurance company.

John - Yes, I have been involved in a water overflow in a condo. My water heater developed a big leak and the pan underneath overflowed causing damage to condo below. Being an Insurance Agent, I reported it to my insurance company and they handled everything. (But, this individual doesn't want to involve his insurance.)
My thinking is since the leak came from the refrigerator (personal property)and if it belonged to the homeowner I'm thinking he didn't have Personal Property Insurance under his Condo Policy as he was renting the Condo. This is why he is coming after the HOA insurance company. Somebody has to investigate this claim. If I was on this Board I would require everything in writing to cover the Board and the Assn. Mareen should ask their insurance company or Agent to put whatever they told her in writing. Nothing in this post has said anything about what it would cost to repair the damages. This homeowner is entitled to know who the HOA insurance company is. Let him file a claim with them if the Board doesn't want to.

PitA
Posts: 1,416

Posted:

Melisa,

One does NOT file a claim against an insurance company. (unless said company has THEMSELVES caused damage)

One files a claim against a person or a corporation.

That person or corporation MAY (not shall) permit you to contact their insurer.

Then one files a claim THROUGH the insurance company.

Or, one uses the judicial system.

State motor vehicle laws, as a matter of public policy, may differ.

ps. I, personally, do NOT divulge my insurance if in an accident. The claimant is free to pursue legal redress through the court system. I do, however, notify my insurer of the incident AND pay the fine for not PRODUCING proof of insurance while actually insured.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By PitA on 08/04/2015 11:13 AM
ps. I, personally, do NOT divulge my insurance if in an accident. The claimant is free to pursue legal redress through the court system. I do, however, notify my insurer of the incident AND pay the fine for not PRODUCING proof of insurance while actually insured.

Not entirely a bad idea except for paying the fines. Around here it can run in the $500 and up range. If you go to court and produce your proof of insurance for the judge the case gets dismissed. Highly unlikely that there will be any record of who your carrier is and even less likely that the other party will be present.

MVD has all insurance records on file electronically. I assume that if another party knows either my name or my license plate number that he can file a claim with his own insurance carrier and they will be able to access the MVD database to find out who mine is.

NancyG3 (North Carolina)
Posts: 342

Posted:

PitA - Was this reply meant for me? No one files a claim against the insurance company. A claim is filed with the insurance company who insures a person or corp.

Since the homeowner is covered under the HOA policy for the building, I believe he could file a claim with the HOA insurance company. Or, the Board should file a claim. Why go thru the judicial system when the insurance company would handle.

In reply to your ps - This has nothing to do with this posting. This would be info for you. Your insurance company is on record with the motor vehicle department and the police can pull up who you are insured with and put info on their accident report. Why would you want to pay a fine for not producing proof of insurance when it is fairly easy to get the information with your tag #? That's why most people have insurance to protect them and handle claims for them.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By NancyG3 on 08/04/2015 7:51 AM
Richard - "This was from the OP's first post, " When I spoke to our insurance they said that we are the Primary insurance. The agent suggested we contact our board attorney."

The person to look at PA Condo Law would be the insurance company. I missed the first part where it said the insurance said to contact the board attorney. I would like to know why the insurance co said this. I'm thinking their agent made this statement not the insurance company. By them saying this they have denied the claim. A denial should come in writing from the insurance company. I think there is more involved in this and it should be handled by the insurance company.

John - Yes, I have been involved in a water overflow in a condo. My water heater developed a big leak and the pan underneath overflowed causing damage to condo below. Being an Insurance Agent, I reported it to my insurance company and they handled everything. (But, this individual doesn't want to involve his insurance.)
My thinking is since the leak came from the refrigerator (personal property)and if it belonged to the homeowner I'm thinking he didn't have Personal Property Insurance under his Condo Policy as he was renting the Condo. This is why he is coming after the HOA insurance company. Somebody has to investigate this claim. If I was on this Board I would require everything in writing to cover the Board and the Assn. Mareen should ask their insurance company or Agent to put whatever they told her in writing. Nothing in this post has said anything about what it would cost to repair the damages. This homeowner is entitled to know who the HOA insurance company is. Let him file a claim with them if the Board doesn't want to.

Nancy

The OP's situation is a townhouse with no units above or below, only side by side and there was only damage in the one unit. It is not a multi-unit type condo building. There is a major difference thus my question about townhomes.

KerryL1 (California)
Posts: 14,550

Posted:

I totally agree with your earlier replies, JohnC.... and mine

NancyG3 (North Carolina)
Posts: 342

Posted:

JohnC46 - I stand corrected. This bring up more questions from me.

Maureen - Does the HOA insurance policy cover dwellings? Why would your Agent say your policy is the Primary insurance. The agent suggested you to contact your board attorney? Did your Agent refuse to take a claim from you. If he did, I suggest you get something in writing from him.

If the HOA policy is the primary insurance, what exactly does this policy cover? Why would your Agent suggest you contact your Board (HOA)attorney if your policy is primary?

If the dwelling is covered under the HOA policy, wouldn't the homeowner be an insured under the HOA policy. If so wouldn't he be entitled to present a claim?

Nancy

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I cannot answer for Maureen but I have lived in two townhome associations in two states (IL & MA). In both states the owner insured from the walls in and the association insured from the walls out.

In one 4 townhouse unit an upstairs toilet broke and over flowed for a month without anyone knowing as the owner was on vacation. The damage was to all 3 levels (basement included) and was close to $75K. The insurance claim was to the owners insurance company. The associations insurance company had nothing to do with the claim as all damage from the walls in.

NancyG3 (North Carolina)
Posts: 342

Posted:

John - Maybe Maureen will let us know what their HOA insurance policy covers. Or what her HOA Declarations say as to what the HOA is responsible for. Her Agent told her they have the primary insurance. Would like to know what this means by primary.

I did a little research and found this. The project legal documents will generally specify whether the insurance policy should be a master policy covering all of the improvements in the project or whether it covers only the common areas improvements or improvements owned by the association and leaves it to individual owners to insure their own property. Certainly the most efficient way to handle insurance in either a condominium or a planned unit development project is to have a single master policy covering all of the units/lots and to have each separate unit/lot owner carry only liability insurance and personal property insurance covering the contents of their unit dwelling or office, as well as payment of the master policy deductible amount. This will eliminate conflicts among carriers because of overlapping coverage, will save overall premiums, and should eliminate gaps in coverage as well as duplication in coverage.

If we knew which kind of policy her Assn has would help in determining if they should file a claim for the owner or do as you say just wait it out.

Nancy

BobD4 (up north)
Posts: 1,002

Posted:

Nancy G3 N Carolina

" Certainly the most efficient way to handle insurance in either a condominium or a planned unit development project is to have a single master policy covering all of the units/lots and to have each separate unit/lot owner carry only liability insurance and personal property insurance covering the contents of their unit dwelling or office, as well as payment of the master policy deductible amount."

"Efficiency" - as you use it above - seems to mean : leaving no basic units nor upgrades to the mercy of insurance-less owners. Less chance of lacking at least debris removal etc. For victims whose standard unit is damaged below a bathtub overflow, at least master policy insurance in place.

But on the contrary "efficiency" can instead mean : best overall bang for insurance buck. . . . some lawyers & insurers arguing that slope-shouldering as much coverage obligation as possible onto individual unit owners, results in a lower TOTAL premium bill paid by the sum of ALL the owners & the master policy.

This different "efficiency" claim, may be suspect. It also leaves open the consequences of rogue owners NOT carrying deductible & standard unit restoration coverage etc whether as victims or as owners of 'source of damage' units. What happens if no insurer will dare sell standrd unit & upgrade & victim coverage to a repeated bathtub flood causer or fire causer ?

The average Director or manager has lots of trouble trying to sort out facts from law in this matter. The least confusing starting point - as I argued above - is successfully sorting out initially what is an insurable loss & what is not. That requires some skillsets and review of law & documents.

DjB2 (Pennsylvania)
Posts: 49

Posted:

Maureen:

I was indeed the author of the prior post and thread about this issue. It is at:
ttp://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/195179/view/topic/Default.aspx

We had a similar experience in 2014 and found out quite a lot about this issue by way of dealing with multiple claims with the insurance company (the Unit owner and the HOA have coverage with the same insurance company, purely incidentally, and both coverages filed); as well as dealing with our HOA attorney (who sided with the Unit owner against the HOA by the way); as well as the HOA's insurance agent (who filed a claim against the HOA - a claim that he later admitted he filed in error).

At any rate, what we found out is that in Pennsylvania (PA), according to the PA Uniform Condominium Act (the PUCA, which supersedes all Bylaws and CC&R's within the state); that the PUCA states that all "improvements and betterments" within the Unit, put in the Unit by all prior owners combined, that those improvements and betterments (which include upgraded "anything" - including floor coverings, kitchen and bathroom upgrades, etc.) are owned by and are the insurable responsibility of the HOA, and not the Unit owner!

The Unit owner's insurance is only responsible for the basic original construction of the Unit, as well as additionally only for any improvements or betterments that the CURRENT owner of the unit installed. According to the PUCA, all improvements and betterments become the insurable risk of the HOA and not the Unit owner, when the Unit is sold. Only the improvements and bettermenst installed by the current owner, as well as the original construction of the Unit, are insurable by the Unit owner.

I realize that this might make little sense - but it is Pennsylvania after all.

Among other locations, you can read the 52 pages of the PUCA at
http://www.parealtor.org/clientuploads/Legal/Statutes/UniformCondominiumAct.pdf

NancyG3 (North Carolina)
Posts: 342

Posted:

BobD4 - What I was trying to do was show that there could be a master policy that would cover the dwellings. It has never been determined what type policy this Assn has. Does the Assn carry insurance on the dwellings and the owner carry the liability and property coverage. When there are 2 insurance company's why not let them handle and find out which policy would apply. My replies have been on speculation because Maureen hasn't said what type policy her Assn has and neither has the owner of the townhouse. I was thinking the dwelling was a condo, until it was pointed out to me it is a townhouse. Let the insurance company's handle and then all our opinions will be taken care of along with the Assn. concerns.

Good luck Maureen.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By DjB2 on 08/05/2015 1:00 PM
Maureen:

I was indeed the author of the prior post and thread about this issue. It is at:
ttp://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/195179/view/topic/Default.aspx

We had a similar experience in 2014 and found out quite a lot about this issue by way of dealing with multiple claims with the insurance company (the Unit owner and the HOA have coverage with the same insurance company, purely incidentally, and both coverages filed); as well as dealing with our HOA attorney (who sided with the Unit owner against the HOA by the way); as well as the HOA's insurance agent (who filed a claim against the HOA - a claim that he later admitted he filed in error).

At any rate, what we found out is that in Pennsylvania (PA), according to the PA Uniform Condominium Act (the PUCA, which supersedes all Bylaws and CC&R's within the state); that the PUCA states that all "improvements and betterments" within the Unit, put in the Unit by all prior owners combined, that those improvements and betterments (which include upgraded "anything" - including floor coverings, kitchen and bathroom upgrades, etc.) are owned by and are the insurable responsibility of the HOA, and not the Unit owner!

The Unit owner's insurance is only responsible for the basic original construction of the Unit, as well as additionally only for any improvements or betterments that the CURRENT owner of the unit installed. According to the PUCA, all improvements and betterments become the insurable risk of the HOA and not the Unit owner, when the Unit is sold. Only the improvements and bettermenst installed by the current owner, as well as the original construction of the Unit, are insurable by the Unit owner.

I realize that this might make little sense - but it is Pennsylvania after all.

Among other locations, you can read the 52 pages of the PUCA at
http://www.parealtor.org/clientuploads/Legal/Statutes/UniformCondominiumAct.pdf

What I was trying to say all along.

BobD4 (up north)
Posts: 1,002

Posted:

DjB2 (Pennsylvania)`s prior topic was “Who’s responsible - the HOA or the Unit owner ?” at http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/195179/view/topic/Default.aspx

He described a 32 unit complex (which was asked if self-managed). A toilet feeder line ruptured and damaged its unit and was the subject of a master policy insurance payout. He has posted what his Board now believes is the meaning of Pennsylvania's Uniform Condominium Act PUCA including section 3312 Insurance of Title 68 Subpart B - Condominiums.

PUCAs ss3312 ( http://www.legis.state.pa.us/cfdocs/legis/LI/consCheck.cfm?txtType=HTM&ttl=68 ) states that a master insurance policy shall maintain :

“3312 (a) (1) Property insurance on the common elements and units exclusive of improvements and betterments installed in units insuring against all risks of direct physical loss commonly insured against or, in the case of a conversion building, against fire and extended coverage perils. . . ”

Additionally ss3312((e) prevents an individual`s otherwise supplementary insurance from being voided by contribution.

MaureenM1 (PA)
Posts: 344

Posted:

thanks for all the responses. Our board met and it was decided to have the insurance companies deal with this. After we get the report we will go from there.

There was another homeowner that owns several homes and rents them and when he had damage by his tenants to his home did not go through out insurance. Now looking back maybe he did but was denied.

Not sure, will have to wait to get the report and go from there.

NancyG3 (North Carolina)
Posts: 342

Posted:

Good thinking on the Boards part. Good luck.

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