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We suggest a through review and understanding of the rights and obligations of the members of the association regarding insurance coverage, disaster planning and recovery. In today’s insurance world, high deductibles and exclusions need to be budgeted for as there will be high out-of-pocket costs following a large loss event. Pre-loss preparation and planning is critical to a successful recovery.
Besides proper insurance coverage and /or financial resources to pay-out-of pocket expenses, our experience has been that those associations who have put in place a key person or persons with leadership skills have come through the best. Communication through good leadership is a critical key to recovery. Part of that process involves the leadership quickly realizing their limitations and consider getting professional help. Insurance adjusting in large loss situations is complex and very time consuming. There will be many issues involved and someone has to represent and manage the loss, a key function of an experienced and qualified public adjuster.
In the confusion and pressure after a large loss, management companies or board members will sign contracts for services without understanding what they are signing or the real cost. If there is a dispute for overcharging related to the scope and price of the work, the insurance company will often take the position that the condo representatives signed an emergency service or repair contract vs. the insurance company and they will only pay what they feel are the reasonable charges for a scope of work they believe is required and not for any unreasonable and unnecessary work. The emergency services contracts should always be reviewed and understood before signing them. Always try to get the insurance company involved on the front-end with the emergency service provider before signing a contract. It’s a good idea to have the associations general legal council read and approve these types of contracts.
Being able to provide records and reports of the property conditions will help you avoid the most common excuse the insurance company will use to try and deny your claim. What we hear most often from insurance adjusters representing insurance carriers, is that damages are pre-existing, old damages, or maintenance problems and thus not covered for the loss reported. Being able to show your insurance company proof of damages with condition surveys completed before the loss will be of great benefit and help win your case in a claim dispute.
Without a doubt, the most frequent and problematic are water losses. Water losses are the most frequent of all insurance perils. When they happen in condos and the damage is to both the unit owner’s property and the master association property it is almost always a very difficulty situation to resolve.
From our experience, it starts when the master association and or their manager fail to take part in the dual role of being involved in making repairs and sorting out the issues of what needs to be done when water and/or mold damages a unit including common element property such as dry wall and building items owned by the condo association and property damaged that belongs to the unit owner.
It is very difficult but often necessary to go to the board of directors and request that they put the insurance company on notice. Often the reason they do not do this is a large deductible, which means the repairs will have to be paid out of a general fund. If you are a unit owner with water damage to the interior of your condo that includes the master association’s property, do not be intimated and push to get the board of directors involved. If the insurance company or the agent balks and will not help you get these claims reported and paid, get professional help. We know the hot buttons to push to get the matter moving and settled so both the insurance carrier for the unit owner and the insurance carrier for the association pay and do what they are suppose to do for their policyholders.