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How to manage a collision between HOAs and homeowners insurance

An insured homeowner's carrier may need to look at that policyholder's condo association master agreement to determine liability for a loss.

By FC&S Editors | Updated on January 31, 2018
A condo association master policy may cover individual unit owners’ “fixtures, improvements, and alterations that are part of the building structure.” (Photo: iStock) A condo association master policy may cover individual unit owners’ “fixtures, improvements, and alterations that are part of the building structure.” (Photo: iStock)

Analysis brought to you by the experts at FC&S Online, the recognized authority on insurance coverage interpretation and analysis for the P&C industry. To find out more — or to have YOUR coverage question answered — visit the National Underwriter website, or contact the editors via Twitter: @FCSbulletins.

Question: This claim involves an HOA and HO6 policy. A collapsed sewer line caused black water damage to the interior of the insured risk. The HOA and homeowner carriers are arguing about who is primarily responsible for damages. The sewer line is under the slab in the middle of the unit. It will require cutting the slab to repair. The HOA insurance company took over 55 days to deny the claim. The homeowner filed a lawsuit against the HOA. The homeowner’s carrier advised they would try to get an agreement with the HOA carrier. Eight months later, no settlement from either carrier, and additional living expenses (ALE) have been exhausted. The insured feels since no agreement has been reached, that the ALE should not be tolled until there is an agreement from their carrier. To date, more than $30,000 has been incurred. They realize that some or all may be recovered from the HOA carrier.

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