Association responsible for insurance, but is condo unit owner's policy valueless?
The woman bought a "condominium owners" insurance policy. With respect to coverage for real property, it stated in part: "We will cover items of real property pertaining directly to your resident premises which are your insurance responsibility as expressed or implied under the governing rules of the condominium."
In March 2002, the insured submitted a claim, seeking coverage for water damage to the interior of her condominium unit that resulted from a water leak in a neighboring unit. The carrier denied the claim, stating that the homeowners association was responsible for obtaining insurance for the claimed loss. The woman sued the insurer for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud.
At a hearing before the trial court, the woman's counsel clarified that she initially made a claim for the water damage to the homeowners association's insurer but that it denied the claim, based on its assertion that its policy "doesn't cover floods." Her lawyer stated that the woman could amend the complaint to reflect these facts. The trial court, however, did not allow this amendment.
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