Making the proper insurance claim to recover damages to your condominium unit following a loss can be a daunting task. The first step to recovery is determining the origin and extent of the damage. Knowing the source of the damage and the extent of the damage will determine coverage and the insurance policies at issue. The next step is to review the applicable insurance policies, association bylaws, and your state’s condominium association statute. These instruments outline required coverages and allocate responsibilities between unit owners and the association. If the damages to an individual unit exceed policy limits then unit owners may find additional coverage after review of the master policy and association bylaws. The largest obstacle to successful recovery often deals with subrogation. A waiver of subrogation provision prevents the insurance company from pursuing legal action against the real party responsible for the damage.
Consider this hypothetical: Unit A is damaged from a leaking pipe from Unit B above. Unit A files a property insurance claim with Unit A’s insurance company. Unit A’s insurance company issues payment for the damages to Unit A. Can Unit A’s insurance company recover from the liability carrier for Unit B?
Consider a second hypothetical: Unit A is damaged from a common water pipe that leaked from the floor above. Unit A files a property insurance claim with Unit A’s insurance company. Unit A’s insurance company issues payment for the damages to Unit A. Can Unit A’s insurance company recover from the liability carrier for the condominium association?
The not so surprising answer to both hypotheticals is: It depends.
Florida Statute Section 718.111(11), governs property insurance for condominium associations. In Florida, every property insurance policy intended to protect the condominium must provide primary coverage for all portions of the condominium property as originally installed or any alterations of like kind and quality. The condominium master policy or association bylaws govern subrogation of property insurance claims. The association must repair any portion of the condominium property insured by the association and damaged by an insurable event. Subjections (f) and (j) are of particular interest:
(f) Every property insurance policy issued or renewed on or after January 1, 2009, for the purpose of protecting the condominium must provide primary coverage for:
1. All portions of the condominium property as originally installed or replaced of like kind and quality, in accordance with the original plans and specifications.
2. All alterations or additions made to the condominium property or association property pursuant to §718.113(2).
3. The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, 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 the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner.
. . . .
(j) Any portion of the condominium property that must be insured by the association against the property loss pursuant to paragraph (f) which is damaged by an insurable event shall be reconstructed, repaired, or replaced as necessary by the association as a common expense. In the absence of an insurable event, the association or the unit owners shall be responsible for the reconstruction, repair, or replacement as determined by the maintenance provisions of the declaration or bylaws. All property insurance deductibles and other damages in excess of property insurance coverage under the property insurance policies maintained by the association are a common expense of the condominium, except that:
. . . .
2. The provisions of subparagraph 1, regarding the financial responsibility of a unit owner for the costs of repairing or replacing other portions of the condominium property also apply to the costs of repair or replacement of personal property of other unit owners or the association, as well as other property, whether real or personal, which the unit owners are required to insure.1
Florida condominium unit owners should review their individual unit owner policy, the master policy, the association bylaws, and Florida’s condominium association statute. Unit owners with a working understanding of these instruments will have the knowledge necessary to maximize recovery efforts following a loss.
