HOA Insurance vs condo owner's own insurance

Started by AlexL1 • 6 replies • 3973 views

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AlexL1 (Florida)
Posts: 305

Posted:

Not sure how to pose this question. It has to do with damage to a condo unit(in a condo complex). Do not know if HOA insurance is standard throughout or if it depends on the State. In particuilar, if a roof leaks due to heavy rains and it gets into the ceiling of the condo and causes some damage to the ceiling, is this an HOA responsibility or is it the individuial homeowner's responsibility with their own insurance?

GlenL (Ohio)
Posts: 5,491

Posted:

The answer to your question is probably in your documents. In our community the Association would pay for the roof repair, replace any drywall that was damaged but the Homeowner would be responsible to paint the new drywall or any spots/rings left by the moisture.

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GeraldT4
Posts: 1,022

Posted:

AlexL1 - You must check your governing documents to see what it states as "The Description of Units", what broad form insurance the Association is responsible to provide, and what the current deductible is that the condo owner must pay, or what deductible the association must pay.

Common sense is that if the association owns and maintains the roof and it's components (sheathing, gutters, vent pipes, etc.) that caused the leak, it must be fixed by the condo association insurance policy. Because if the association owns and maintains the roof the owner can't do any repair, correct? Where it gets tricky is what is covered on the interior in the event of a loss and who pays the deductible.

In my COA the association is responsible to replace everything, I repeat everything to it's original conveyance. The owner is responsible for a $5,000 deductible. Thereafter, the association has to fix it to the way it was originally purchased. It is stated in our association policy and governing documents that upgrades purchased from the developer are covered. Meaning that if I had the developer install upgraded hardwood floors and there was a roof leak, and the floors got destroyed, I pay the first $5,000 and the association has to replace all the rest. This is rather comprehensive insurance and unusual for townhouses but it is what it is until the association owners amend otherwise.

MikeS1
Posts: 668

Posted:

All condo owners (incl condo rental properties), should have what is called generally an HO6 condo package policy and they are very cheap. Condos may define an imaginary line at either IE - The interection of the face of the stud and the back of the drywall, or they may define ownership interest at the face of the outside of the unfinished drywall etc. The Master policy should detail this. Single Entity or bare walls policy.. etc. The master policy will pickup that part of the building that is owned by definition by the COA and other structural damages within the confines of your unit may be covererd by your insurance policy (HO6 iso form) under what's called Improvements, Additions/Alterations or Betterments. Now the Condo Association may have a huge deductible (1-10K) so they might not actually have a claim with the carrier who has the master policy, but you can certainly file a claim under your insurance. BTW, the cost to repair the defect is not usually covered... only the resulting damage. Contact your professional, licensed agent in your state for more exact information regarding this.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Alex,
That is a complex question. Your Documents will spell out what is owner responsibility and what is association responsibility in a common shared roof and walls. Usually, the association is responsible for all roof and any sub structure that supports the roof but that ends at the drywall. Owners are responsibile for the drywall and paint replacement. Because this was caused by a failure of association property, they then SHOULD be responsible for replacement and repair of the drywall and paint. BUT, the association policy concuring with your insurance will be the answer.

AnnJ1 (Florida)
Posts: 122

Posted:

AlexL1,
Your question is very timely for my association....
We just discovered last week that our condo docs may have a conflict with the statutes (FL Chap 718) inasmuch as our documents stipulate horizontal and vertical boundries to be at the outermost surface of the studs. The vertical boundries include the wallboard (I'm shortening the language for brevity in posting) and because of a recent burst pipe in a condo, which resulted in interior drywall damage, we were shown a "Division" ruling on a similar matter. The Florida Division ruled in its Declaratory statement that:

1. In accordance with section 718.111(11), Florida Statutes, XXXXXXXXX Lake at
XXXXXXXXXXXX Condominium Association, Inc. is obligated to make its best effort to obtain and maintain adequate property and casualty insurance for the condominium property located inside the units as such property was initially installed, which includes the interior drywall in the units, but excludes any wall coverings.
............................................................................

Chapter 718.111(11) (excerpted) reads:
(b) Every hazard insurance policy issued or renewed on or after January 1, 2004, to protect the condominium shall provide primary coverage for:
1. All portions of the condominium property located outside the units;
2. The condominium property located inside the units as such property was initially installed, or replacements thereof of like kind and quality and in accordance with the original plans and specifications or, if the original plans and specifications are not available, as they existed at the time the unit was initially conveyed; and
3. All portions of the condominium property for which the declaration of condominium requires coverage by the association.

Anything to the contrary notwithstanding, the terms "condominium property," "building," "improvements," "insurable improvements," "common elements," "association property," or any other term found in the declaration of condominium which defines the scope of property or casualty insurance that a condominium association must obtain shall exclude all floor, wall, and ceiling coverings, electrical fixtures, appliances, air conditioner or heating equipment, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of a unit and serve only one unit and all air conditioning compressors that service only an individual unit, whether or not located within the unit boundaries. The foregoing is intended to establish the property or casualty insuring responsibilities of the association and those of the individual unit owner and do not serve to broaden or extend the perils of coverage afforded by any insurance contract provided to the individual unit owner.

HTH,
Ann

GeraldT4
Posts: 1,022

Posted:

AlexL1 - My read is that your docs exclude the sheetrock whereas Chapter 718.111 doesn't. So the Association insurance must comply. Additionally that 718.111 excludes floor coverings, but not floors themselves. As well 718.111 excludes coverage due to loss of cash and carry purchased by the owner (as it should), and cabinetry, granite/countertops and further things listed therein and excluded. While one might initially think that 718.111 covers elements inside the unit at initial conveyance it does not because it defines "condominium property" to exclude certain items as I've noted above.

Now, while Florida 718.111 permits an Association from being OBLIGATED to provide the very broad form coverage, it doesn't restrict the Association and or it's residents for paying for that additional coverage. So basically, my read is that 718.111 expands and better defines what coverage is required but doesn't go so far as to unreasonably increase and make mandatory unrealistic insurance costs to an Association and therefore to the residents.

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