Insurance woes

Started by LoriM15 • 18 replies • 342 views

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LoriM15 (Florida)
Posts: 1,009

Posted:

We got a letter a few weeks ago from one of the biggest slip and fall law firms (if you're from the southern US you will recognize "for the people"). Someone claimed they fell on the sidewalk in the community and immediately engaged this firm. We sent the letter to our insurance company. A couple of days ago, we got a denial letter from our liability carrier, stating that since the fall didn't happen on the property address named on the policy (our clubhouse address) then the claim wasn't covered. Basically, the insurance company is saying that none of our sidewalks, roads, lakes, etc. have liability coverage because they are not specifically at that address.

Needless to say, this is a huge issue for us. We have miles of sidewalks and get several claims a year. No coverage leaves us open to huge liability. I contacted our insurance agent, he contacted the broker and the underwriter, and they are working with the insurance company. We verified we are paying premiums (a huge amount of premiums, by the way) for coverage for everything and the underwriter INTENDED for everything to be covered, but the insurance company is taking a very narrow view. However, we are being told this might take a while to get worked out.

Meanwhile, we have this open potential law suit. I contacted our HOA attorney who was pretty vocal (his words were "holy crap")! We need an attorney to cover us for this suit and just in case something else comes up, plus we may need to sue the insurance broker for this gap in coverage. He is going to find one of his partners to take this on since he only specializes on HOAs.

This is just a warning to check your policy and then check it again to make sure that you are actually covered. I didn't think the insurance situation in Florida could get much worse, but obviously it has.

KerryL1 (California)
Posts: 14,550

Posted:

So sorry, Lori. Hope the experts can work it out for your community.

MarkM19 (Texas)
Posts: 1,459

Posted:

Lori,
In your second paragraph you mentioned you have several claims a year. Where any of these sidewalk claims? If it was covered in the past and the current policy does not have any exclusion, I would think the carrier maybe wrong in Dening the claim.

I am definitely Not a lawyer, so my advice is free but worthless.

ElleN (Idaho)
Posts: 4,420

Posted:

I would not call MarkM19's observation worthless at all. I would hope the HOA attorney points out what MarkM19 said to the insurer.

I see another problem here: How can a sidewalk or pond have an address per se? The postal service certainly does ot assign them addresses per se.

But it's not worth getting into. I figure Lori just wanted to present the gist of the situation and not analyze every word of the insurance policies (past and present).

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I think your HOA may be overthinking the whole situation. Plus overpaying lawyer. You have not been sued yet. If I recall, if someone falls on certain property it may be covered under that homeowner's insurance. It does not automatically land on the HOA's insurance to be claimed. Plus the claim would be their medical bills. Is their medical bills going to be more than the lawyer bill or insurance deductible?

Find out what the expenses would be in worst case scenerio than keep wasting time and money preventing it. There are limits on what someone can collect for injuries. There is rarely any punitive damages awarded in such cases.

Former HOA President

KerryL1 (California)
Posts: 14,550

Posted:

Aidyl make sense. The legal address, it seems to me, is that of the "registered agent" of the Association. This may or may not be "the clubhouse." If "the Association" is insured, all common areas are.

What is the address of the registered agent of your HOA, Lori? Don't you have to provide that to Owners a Onan annual basis in some kind of Policy Statements or with your budget that goes to Owners?

TimB4 (Tennessee)
Posts: 21,062

Posted:

Obviously, it will depend on the language within your insurance coverage.

I find it difficult to understand that an insurance company, insuring an HOA with a general liability coverage, would not include all common areas and common elements.

I will certainly review the coverage our Association has.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I re-read your post. Slow your roll on this whole situation. Stop running to your lawyer at every "threat" of lawsuit. This is how a HOA gets milked. Your insurance company is 100% correct. The fall did NOT happen at the place the insurance covers. Which is your clubhouse. They "fell" somewhere else. This does NOT make it an HOA issue.

1. It most likely is on the homeowner's insurance policy where the incident happened. Your homeowners insurance (NOT HOA) should have this coverage. This falls along the lines of "If a kid is trick or treating and falls on my lawn...". The first claim goes to the ADDRESS it happened. It does NOT go to the HOA.

2. This legal firm is going for the source where the "most money" may exist. They believe a HOA has the deepest pockets. The funny part in ALL of this... This legal firm most likely knows very well the HOA is NOT responsible. It's most likely an insurance claim. They just sent the letter to the source that would most likely pay off.

3. NEVER EVER go running off to a lawyer for every threat of a lawsuit. This letter did not qualify a trip to your lawyers office. It did need a conversation with your insurance company. Who would be handling this most likely. This is a CLAIM NOT a lawsuit.

4. Look at what the worst scenario is. They have medical bills? The HOA would be on the hook for paying their medical bills. Anything else would be just "icing on the cake" for them. The HOA may need to fix the area the accident happened. Otherwise the HOA is on the hook for DAMAGES only.

5. Again do not panic any time you get a threat or a letter for a lawsuit. People can sue for anything and anytime. Does NOT mean need to react. Plus it's cheaper to counter sue than to sue. You don't need a lawyer to countersue. Just need to respond to the legal paperwork. (Which you have not been served).

It's time to go educate yourself about insurance and lawyers. Never believe a lawyer who says "I will do what you tell me to do". This leaves options less explored. It is okay if they say it AFTER they give you OPTIONS to follow. It is NOT okay if they say it BEFORE you talk options. They will do what you tell them to do. In this case, your HOA would not doing the best for itself if you knee jerk react to a letter.

People romanticize lawyers and the legal system. Too many TV shows. There is a process not shown on TV. Plus a court can only make one "WHOLE" NOT a profit. Any lawsuits you may here getting paid millions of dollars involve more than what you see on the surface. They are often "punitive" in nature like the McDonald's hot coffee suit. Also of note. If you see those "Car Accident" commercials that recovers thousands of dollars for the victim...look at the FINE PRINT!!! They Always say "Actor portrayal". Why? Most likely if someone won a million dollars in a car accident, they are permanently scarred or handicapped for life. They are NOT going to show you on TV the real person who lost a limb to sell you on hiring them...

Just don't panic when a lawyer sends you a letter. It's a scare tactic. My response to anyone threatening to sue us: "Thank you. I will see you in court when you send us the papetwork. Have a good day!". I am not scared of a lawsuit and to held hostage of the threat of one. Once that "fear" is out of the picture, you can usually negotiate a solution in a calm manner.

Former HOA President

LoriM15 (Florida)
Posts: 1,009

Posted:

A little more information - we were non-renewed by our previous insurance company (the one where we have an open claim for nearly $500k for hurricane damage that we are still negotiating). They non-renewed us partly because we had too many claims, not including the hurricane one. So this is a new company with a policy effective June 2023.

We have had a bunch of slip and falls. It may just be Florida or maybe it's the way the world works now, but people fall or claim they fell and then go to a slip and fall attorney to get easy money. Most of the time they get a thousand dollars or so just by making a claim with the insurance company. Melissa is right in some ways, just getting a letter asking us to file a claim with our insurance company is not a big deal. They are hoping that they'll get their money and go away.

However, the big deal is that now that the slip and fall attorney knows the claim has been denied, we need to be prepared for a potential lawsuit. At this moment, the insurance company's position is there is no liability coverage for anywhere other than the clubhouse, which is the address we use for our registered agent.

With this gap in coverage, we are open to huge amounts of liability if something were to happen anywhere on the property besides the clubhouse. I know a lot of people think lawyers are greedy and just out to take advantage and make a lot of money. However, I have no problem getting our HOA attorney involved in this. What he charges us is very reasonable for his professional advice. To me, paying the attorney is like paying an electrician or a plumber for their expertise and to be honest, our attorney charges less than an electrician or plumber (I know that because I have been doing some home renovations).

We also might have to have our attorney get involved in a lawsuit against the insurance company or the insurance broker for this mistake in coverage if it does end up costing us money.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

You are missing some of my points. Your HOA is NOT missing a gap in insurance. Your HOA does not to insure everything. Your HOA is taking in more coverage than needs.

The person who fell is ONLY entitled to medical costs. Which in some cases could be as little as their medical deductible. If they claim as they should with homeowners policy, then deductible for that. The fact is the person should have their own insurance in place medical or homeowners. The HOA is not in the business of being a doctor, giving medical advice, or used to avoid paying their insurance claims.

Simply put, these people who claim these falls are going for quick money and false information of how that works. They are trying to avoid using their own insurance. Stop paying so they can collect on yours. That is what need to ask a lawyer about. What is worst they can claim and is it more than deductible?

Former HOA President

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By LoriM15 on 12/08/2023 7:06 AM
However, the big deal is that now that the slip and fall attorney knows the claim has been denied, we need to be prepared for a potential lawsuit.

It seems to me that slip-n-fall attorneys largely exist precisely because insurance exists. The insurance just about guarantees a quick and easy payout.

For the moment, there's no insurance. Hence no easy payout. I wonder if the slip-n-fall attorney is now less likely to sue on behalf of his/her client.

This situation is yet another reason I feel many HOA directors should be paid just like city council members are paid.

DeanJ
Posts: 1,786

Posted:

If alleged sidewalk is on HOA property, the HOA is the plaintiff in any lawsuit. If the address location is all your insurance covers, be thankful you didn’t use a PO Box.

LoriM15 (Florida)
Posts: 1,009

Posted:

Last update on this. I got word from our insurance broker yesterday that, after a long conversation between the insurance company and the underwriter, they agreed to remove an endorsement that was limiting our coverage to the named address.

I also found out after nosing around that the guy who slipped and fell was able to walk about a mile home after the "accident". He says he slipped on some loose, sandy stuff on the sidewalk. He did have a broken fibula. Meanwhile, the slip and fall attorney apparently didn't think there was enough money in this accident and they dropped him. He's not pursuing it. In a way it's a blessing in disguise that he went to the attorney - otherwise we would never have known we didn't have coverage.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By LoriM15 on 12/09/2023 12:52 PM
Last update on this. I got word from our insurance broker yesterday that, after a long conversation between the insurance company and the underwriter, they agreed to remove an endorsement that was limiting our coverage to the named address.

I also found out after nosing around that the guy who slipped and fell was able to walk about a mile home after the "accident". He says he slipped on some loose, sandy stuff on the sidewalk. He did have a broken fibula. Meanwhile, the slip and fall attorney apparently didn't think there was enough money in this accident and they dropped him. He's not pursuing it.

Interesting. I wonder if HOA boards should always "leak" that the HOA insurer is denying a claim. Or maybe insurers should always start off with "We are denying the claim, because of ___ (some reason with at least some basis in reality)." Then let things percolate a bit. See what happens. Do not make it easy for any ambulance chasers.

DeanJ
Posts: 1,786

Posted:

HOAs generally have assets in cash and real estate large enough to many attorneys not to just walk away because the insurance says they aren’t coving an accident.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By DeanJ on 12/09/2023 2:07 PM
HOAs generally have assets in cash and real estate large enough to many attorneys not to just walk away because the insurance says they aren’t coving an accident.

Interesting opinion.

I hope you realize that the point of many ambulance chasers is to not go to court but instead get a quick settlement. When a HOA does not have insurance, and simply says, "Sue us," my opinion is that this puts a full stop on the attorney's original strategy, and he/she is going to re-think the approach here.

LetA (Nevada)
Posts: 2,679

Posted:

Typical case of an insurance company not wanting to do their job. Don't sweat it because you had to call your HOA attorney
to get your insurance carrier to do their job. Stay the course and I hope everything works out.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I know of one slip and fall attorney, who is a heavy TV advertiser, that has about 25 attorneys in his office of which only one has ever been to trial.

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