Neighbors House Caught on Fire and Mine Received Damage Due to the Fire...

[xrac]

something very similar happened to me and i thought i'd share. a fire on the neighboring property damaged my unit and the common area fence from the heat. the neighbors insurance company decided they were not negligible and so wont cover my damage.

i have a condo, so normal condo insurance is what i have and that only covers the interior of my condo (and stuff like windows). my HOA insurance, for which i pay as part of my HOA fee, is supposed to cover the outside of my unit and common areas of the complex (i.e, everything not covered by my insurance). however, it turns out there is a small clause in the HOA agreement stating that if their insurance amount is not enough to pay all damages the owner is liable for the difference. and since their deductible is $5k and the damage was only $3k, they decided not to file. so the HOA people say i'm stuck with all of it. o joy.

personally i don't think it's legal for the HOA to claim this. since they did not even file a claim with their insurance company they cannot say their insurance coverage amount was "not enough" - it was not any at all! i am going to the HOA meeting wednesday to try and argue for them to pay for everything out of pocket, which is what anyone has to do if it doesn't meet their insurance deductible.

i'd appreciate if anyone has any advice or resources or anything. thanks!
-jb

Sounds like your HOA needs to re-evaluate their coverage. Sounds like you guys are stuck with a $5k deductible like it or not.

 

[joebob]

yea but who has to pay the damage out of pocket, the HOA or me? my understanding is i am responsible for the inside and the HOA for the outside.

here's the part of the HOA agreement they say means i have to pay:

Section 9.2 Damage or Destruction of Project, "A. Damage to a Single Unit". This section of the CC&R's states, "If the insurance proceeds are insufficient to complete the work, the owner shall pay whatever additional sums may be necessary to complete the rebuilding and repair."

i say that's not true since there are no "insurance proceeds", so they can't be insufficient, and so the HOA should have to pay.

 

[xrac]

yea but who has to pay the damage out of pocket, the HOA or me? my understanding is i am responsible for the inside and the HOA for the outside.

here's the part of the HOA agreement they say means i have to pay:

Section 9.2 Damage or Destruction of Project, "A. Damage to a Single Unit". This section of the CC&R's states, "If the insurance proceeds are insufficient to complete the work, the owner shall pay whatever additional sums may be necessary to complete the rebuilding and repair."

i say that's not true since there are no "insurance proceeds", so they can't be insufficient, and so the HOA should have to pay.

I agree that this doesn't sound fair to me. I think the HOA shoul pony up.

 

[BigIVU]

Check your condo policy. The ISO-standard HO-6 policy covers structural damage to...

Property which is your insurance responsibility under a corporation or association of property owners agreement;

If the condo covenants make you responsible for the damage, your policy may cover it.

I can't imagine, if the outside of the building has smoke or fire damage that the HOA would just leave it like that. If it's common property, they can have it fixed and assess the homeowners.

 

[joebob]

i do have an HO-6.. there is no "structural damage", it's relatively minor exterior damage to my unit like a damaged air conditioner unit, bubbling paint, a window and window frame cracked from the heat, etc. i spoke with my HO-6 guys and they said just the window falls in their area, and that doesn't meet my deductible.

in the HOA agreement it says the insurance i have through the HOA covers common areas of the complex and the outside of my unit. however the HOA says that since the outside damage doesn't meet their deductible i have to pay. i think they should have a fund or something to pay for things that are their responsibility but under their deductible.

also, there is some damage to common area fencing that is clearly their responsibility, and they are trying to get me to fix that also.

they definitely do not want to leave it damaged like it is now - first they tried to make me get the neighbors insurance to cover it, which i did and which they declined to do saying the neighbor was not negligent in letting the fire happen on their property. so ... basically everyone has a loophole and leaves me holding the bag. and to be honest i'm more worried about this "hole" and what happens next time then having to pay this particular bill. it seems like i'll have to get additional insurance to cover exterior damage below the HOA insurance deductible... or be ready to pay up to $5k every/any month.

 

[BigIVU]

"in the HOA agreement it says the insurance i have through the HOA covers common areas of the complex and the outside of my unit. however the HOA says that since the outside damage doesn't meet their deductible i have to pay...also, there is some damage to common area fencing that is clearly their responsibility, and they are trying to get me to fix that also."

I'd question whether the condo bylaws put the responsibility on your to repair damage to these common areas. Again, if the common area damage is less than the master policy deductible, why don't they simply repair it and assess the homeowners?

 

[winnersgetdinners]

Loss assessment? Would that cover this?

 

[joebob]

what is Loss Assessment?

i am not going to pay to fix damage to common areas so they will have to do something about that.

i figured a HOA would be required to have a fund to cover up to their insurance deductible, not put that off on the owner. basically now i am liable for up to whatever they decide to have the HOA insurance deductible be, even though i pay for that as part of my HOA dues. definitely i will be having a talk with them at the next HOA meeting in a few days. this just can't be right it seems to me

 

[BigIVU]

ISO standard language:

Loss Assessment
a. We will pay up to $1,000 for your share of loss assessment charged during the policy period against you, as owner or tenant of the "residence premises", by a corporation or association of property owners. The assessment must be made as a result of direct loss to property, owned by all members collectively, of the type that would be covered by this policy if owned by you, caused by a Peril Insured Against under Coverage A, other than:
(1) Earthquake; or
(2) Land shock waves or tremors before, during or after a volcanic eruption.
The limit of $1,000 is the most we will pay with respect to any one loss, regardless of the number of assessments. We will only apply one deductible, per unit, to the total amount of any one loss to the property described above, regardless of the number of assessments.
b. We do not cover assessments charged against you or a corporation or association of property owners by any governmental body.
c. Paragraph P. Policy Period under Section I – Conditions does not apply to this coverage.
This coverage is additional insurance.
- - - - - - - - - - - - - - - - - -
If commonly owned property is damaged, on what basis do they charge you individually with the responsibility to have it repaired?
- - - - - - - - - - - - - - - - - -
P.S. The bad news is that the property loss assessment coverage is usually subject to the policy deductible for each condo owner. The good news is that, if there are a significant number of common owners, the assessment is usually not that great.

 

[winnersgetdinners]

ISO standard language:

Loss Assessment
a. We will pay up to $1,000 for your share of loss assessment charged during the policy period against you, as owner or tenant of the "residence premises", by a corporation or association of property owners. The assessment must be made as a result of direct loss to property, owned by all members collectively, of the type that would be covered by this policy if owned by you, caused by a Peril Insured Against under Coverage A, other than:
(1) Earthquake; or
(2) Land shock waves or tremors before, during or after a volcanic eruption.
The limit of $1,000 is the most we will pay with respect to any one loss, regardless of the number of assessments. We will only apply one deductible, per unit, to the total amount of any one loss to the property described above, regardless of the number of assessments.
b. We do not cover assessments charged against you or a corporation or association of property owners by any governmental body.
c. Paragraph P. Policy Period under Section I – Conditions does not apply to this coverage.
This coverage is additional insurance.
- - - - - - - - - - - - - - - - - -
If commonly owned property is damaged, on what basis do they charge you individually with the responsibility to have it repaired?
- - - - - - - - - - - - - - - - - -
P.S. The bad news is that the property loss assessment coverage is usually subject to the policy deductible for each condo owner. The good news is that, if there are a significant number of common owners, the assessment is usually not that great.

I just want to make sure I understand this correctly: if you have LA coverage for the deductible amount, would it apply? I'm not overly familiar with condos, a lot having to do with the master policies being so different between buildings and associations.