Condo or Homeowners Association: Who Handles the Claim?

Insurance confusion is common in condos and HOA communities.

Condo associations and HOAs have their benefits. They can also complicate insurance claims.

Who’s responsible for what when disaster strikes? Are your homeowners insurance premiums about to increase? Let’s find out.

Condo Associations vs. HOAs

Condo associations and HOAs have similar responsibilities. They govern the use of shared property and establish community guidelines.

Some of the differences between a condo association and HOA, from an insurance standpoint, include:

• Condo owner associations (COAs) typically own the structure and common areas. Any insurance plan will also cover these shared areas.
• Homeowners associations (HOAs) typically cover a planned community of single-family homes. Some have shared property – like a clubhouse or pool. Others do not.

Some communities also have a property owners association, or POA.

What is a Master Policy?

Both condo associations and HOAs often have a master policy.

A master policy is like umbrella coverage for a community: it covers all shared property and shared areas within an association.

A master policy may cover shared areas like:

• Roof
• Siding
• Hallways
• Elevators
• Pools

Some master policies also cover the interior of the unit, although it depends on the type of policy.

Common types of master policies include:

• Bare Walls: Only covers the structure and shared elements.
• Single Entity: Covers the structure, shared elements, and original fixtures in units.
• All-Inclusive: Covers everything in the unit, including upgrades.

All-inclusive master policies are rare. Typically, condo associations and HOAs use a bare walls or single entity master policy.

What Are You Responsible For?

As an owner in a condo association or HOA, you’re generally responsible for everything inside your walls.

That includes things like:

• Personal property (your appliances, furniture, clothing, TV, etc.)
• Interior damage (to drywall, cabinets, or flooring, for example)
• Liability inside your unit
• Additional living expenses (ALE) after a loss

How Conflicts Occur

Condo association and HOA conflicts occur when damage occurs in both a shared area and a private area.

If a toilet overflows in a unit, for example, it may cause considerable damage to the unit itself, the unit underneath, and the shared hallway and staircase nearby.

Common conflict scenarios – and how they’re typically resolved – include:

1. Burst Pipe in the Wall Between Units: When a pipe bursts in the wall between units, it can be tricky to determine who covers what. Who files the claim? Who repairs the damage? Who pays? Typically, the HOA or condo association covers burst pipes when the damage occurs between units.
2. A Leaky Roof Damages Your Ceiling & Floor: Leaky roofs are a common source of insurance claims within shared dwellings – like condos and apartments. Typically, HOAs and condo associations repair the roof. However, you may need to file your own insurance claim to repair damage to your ceiling and floor. That means paying your own deductible and potentially facing higher insurance premiums.
3. Damage to Multiple Units: If a single event – like a fire, storm, or fallen tree – causes damage to multiple units, then it can trigger claims on the association’s master policy and on the individual unit owner’s policy.
4. Water Damage from Another Unit: This is one of the most common sources of insurance disputes. Solving this issue depends on the source of the water intrusion – say, a shared burst pipe between walls or an upstairs neighbor’s leaky dishwasher. Typically, your own policy covers sudden and accidental water damage from sources within your unit – including liability to surrounding units.

How Public Adjusters Help with Condo & HOA Claims

Condo associations and HOAs don’t always feel like they’re on your side – especially in an insurance dispute.

What happens when they drag their feet? What happens when a member of the association uses a substandard contractor because of a personal relationship? Who covers additional living expenses?

In many cases, it’s worth hiring a public adjuster to deal with a complicated condo or HOA claim – especially if there’s a large amount (over $10,000) of money at stake.

Some of the ways public adjusters help with condo and HOA insurance claims include:

• Analyzing damage and applying your coverage to ensure fair treatment.
• Providing evidence to support your claim – say, that the burst pipe was in between walls and not within your unit.
• Organizing documentation, photos, videos, and other proof to support your loss.
• Negotiating with the insurer, COA / HOA, and other stakeholders while representing your best interests
• Navigating complex insurance claims effectively to help you come out ahead

Public adjusters work on contingency, so you don’t pay until after the final settlement. At that point, public adjusters charge a prearranged percentage based on the value they brought to the claim. It’s a win-win: you get the settlement you deserve, your public adjuster is compensated for the value they brought to the claim, and your insurer, HOA, or COA is held accountable.

Final Word

Typically, condo owners are responsible for damage that occurs within their walls. Condo associations and HOAs can make claims messy, but they help manage risk over shared property.

Dealing with a tricky insurance issue involving your HOA or condo association? Ironside Claims has firsthand experience solving insurance disputes.

From ceiling damage claims to burst pipes between walls, Ironside Claims’s licensed public adjusters have seen it all. Contact us for a no-cost, no-obligation consultation and discover how we could change the future of your claim.