Paying earthquake claims under a bare walls condo policy

Coverage Q&A: A condominium building was declared a total loss after an earthquake, but individual units suffered no damages.

The Immaculate Concepcion Catholic church lies in ruins after an overnight earthquake in Guayanilla, Puerto Rico, Tuesday, Jan. 7, 2020. A 6.4-magnitude earthquake struck Puerto Rico before dawn on Tuesday, killing one man, injuring others and collapsing buildings in the southern part of the island. (AP Photo/Carlos Giusti)

Every claim is different, and some insurance policies can be difficult to interpret for unique situations. FC&S Expert Coverage Interpretation, the recognized authority on insurance coverage interpretation and analysis for the P&C industry, makes it simple to find credible answers to your complicated coverage questions. Analysis brought to you by our FC&S experts. 

Editor’s Note: This week’s question deals with condominium coverages for both the condo association and the individual unit owners following an earthquake. What happens if the condominium is considered a total loss? Will the individual unit owners be eligible for insurance coverage?

Question: As a result of an earthquake, a residential condominium insured under a bare wall policy suffered significant damages and may be considered a total loss. However, individual unit owners are insured under dwelling policies (DP1, DP2 or DP3) whose apartments did not suffer damages or have partial damages.

If the condominium is declared a total loss under the bare wall policy, do we have to pay under the dwelling policies even if no damage to the unit is present?

— Puerto Rico Subscriber 

Answer: To learn the answer to this week’s coverage Q&A, please log into your FC&S Expert Coverage Interpretation account.

Related:

Recommended Stories