October 6, 2016
Condominium association property claims can be contentious and confusing. Large condominium buildings often are the subject of multi-million dollar insurance claims, lawsuits, and appraisals. The “cookie-cutter” nature of condominium unit construction dramatically increases damage claims and requires prudent consideration and allocation of resources for proper and expedient claims handling.
We often see mistakes made during a claims investigation and adjustment that could have prevented much larger payouts later. To avoid mistakes, here’s a “Top 10” list for properly handling Condominium Association insurance claims, in no particular order:
- Document all damaged and undamaged property with high-resolution photographs;
- Interview residents and other witnesses about new and old damage and document those conversations;
- Obtain the condominium association declarations and bylaws, as well as board meeting minutes, to determine association vs. unit owner property and responsibility, as well as confirm any historical maintenance issues. DO NOT RELY on conventional understandings of unit owner vs. condominium association property;
- Hire experts, including engineers and general contractors, to assist with claims investigation when necessary. Good estimating software is invaluable, but the early hiring of experts can provide needed assistance with complex claims and any subsequent litigation;
- Correctly calculate the ACV of the damaged property. We often see things mistakenly included and excluded in ACV calculations;
- Be proactive in obtaining agreements with the insured on the amount of loss or any elements of it;
- Advise the insured clearly, in writing, that if repairs are made and more damage found, further payments will be considered;
- Use policy investigative tools like the proof of loss and examination under oath to confirm the damage claim and even the obvious facts critical to coverage;
- Review carefully Florida condominium law on insurance and obtain coverage opinions when in doubt;
- Review the underwriting file.
This particular area of Florida insurance law is another dimension to the already complex nature of Florida property insurance law. We are here to assist in the navigation of these and other property insurance claims.