HO-6 denies claim without confirming coverage...

[Scott9342]

I believe that a court would interpret that section as applying to the current owner as compelling an owner to go back 40 years to try to piece together what previous owners did would be unconscionable and against public policy. Further, ambiguities are generally construed against the party who drafted the document, especially when it is a contract of adhesion.

That is, unless a document exists which specifies exactly what the original specs are, and there is some responsibility on the part of the HOA or at least property management to maintain and preserve that document. Hopefully I'll find out soon whether this ancient document exists.

Agree. CC&Rs that I have read (other than this one) specifically and comprehensively define "unit" and "common elements" and specify how the master policy provides coverage.

It sort of blows my mind that these CC&Rs haven't been changed since 1972. Although it's only a 17 unit building, due to the passage of time I find it hard to believe that my situation is an unprecedented event in the community. Not sure how similar situations were resolved with these CC&Rs as written.

 

[Allen Trent]

I think that makes sense. The coverage afforded by the HOA policy would change every time ownership of a unit changes hands.

It does essentially change every time because the owner of the improvements changes every time an improvement is made. IE: If Formica was part of the basic unit as constructed & a unit owner puts granite in the kitchen, the granite improvement is now owned by the unit owner, not the association. But the Formica in all the other areas of the unit are still owned by the Association, unless improved by an owner.

I am honestly shocked there isn't constant problems when claims occur on this stuff because it is gets complicated. I honestly cannot think of a more complicated insurance topic to try to figure out what should be insured when a policy is written & how to process a claim than this exact topic.

BTW, I am guessing most bylaws & covenants, etc require pre-approval by the Architecture committee of the association before any tenant improvements can be made.

Keep in mind, a Condo Association is not an HOA. it seems like it, but most if not all states have completely different laws governing Condo Associations than HOA. I think it is because a unit owner has ownership rights to all buildings, but in an HOA there is no ownership of any common areas, etc.

 

[Allen Trent]

It sort of blows my mind that these CC&Rs haven't been changed since 1972. Although it's only a 17 unit building, due to the passage of time I find it hard to believe that my situation is an unprecedented event in the community. Not sure how similar situations were resolved with these CC&Rs as written.

I live in a HOA lake association. there are very minor dumb things we need to change & correct. however, the deed restrictions require not only 90% of all owners to agree to any change, but require 90% of all owners to sign the deed restriction change documents. It will never happen. Getting 90% to agree on anything would be hard enough, but getting 90% to 1st agree, then all owners (spouses on some, trustees) to then show up to a title office to sign the deed changes is unlikely. It is hard enough to get a quorum to conduct a vote. you may have the same issue as you might need to see how many people would have to vote to change yours. condos also have a bigger challenge to change because elderly residents may be out of state or institutionalized to execute the documents. This might be a bigger reason why they have not changed since 1972.

 

[Scott9342]

I live in a HOA lake association. there are very minor dumb things we need to change & correct. however, the deed restrictions require not only 90% of all owners to agree to any change, but require 90% of all owners to sign the deed restriction change documents. It will never happen. Getting 90% to agree on anything would be hard enough, but getting 90% to 1st agree, then all owners (spouses on some, trustees) to then show up to a title office to sign the deed changes is unlikely. It is hard enough to get a quorum to conduct a vote. you may have the same issue as you might need to see how many people would have to vote to change yours. condos also have a bigger challenge to change because elderly residents may be out of state or institutionalized to execute the documents. This might be a bigger reason why they have not changed since 1972.

Interesting point. I think it's 75% for me. But I also believe about 1/3 of the owners rent out their units and so perhaps don't get involved.

 

[adjusterjack]

Hopefully I'll find out soon whether this ancient document exists.

The original plans for the buildings may still be on file at the local building department.

I am honestly shocked there isn't constant problems when claims occur on this stuff because it is gets complicated. I honestly cannot think of a more complicated insurance topic to try to figure out what should be insured when a policy is written & how to process a claim than this exact topic.

It's entirely possible that previous adjusters didn't take the current adjuster's position and just paid the claim based on their insurance company's common practice.

 

[geneseehill]

In CA denials have to be in writing outlining the applicable reason(s). They letter also needs to advise you that you have the right to to contact the Insurance Commissioner with their address & phone, etc. if you disagree. Have they done this?

The basic HO-6 or Condo policy has a 1k Assessment Coverage limit. I had a client with a water damage claim (toilet overflow) and his insurer, Metropolitan denied the claim with the false impression that the underlying policy for the Association should pay for first party damages and resulting water damage to the tennants in the floor below. In this case, we had purchased expanded Assessment Coverage (20K) for an additional $8-$12.

The insured turned the entire matter over the the Association who Assessed the insured for the full amount of the damages to the other units (90% of the damages). The carrier then paid the claim under the Assessments coverage extension. I called the adjuster before I forward the docuents to him and he was very smug, explaining that there was only 1k of coverage. I pointed out the 20k limit and was met by silence.