Condo insurance question

[DownInFlames]

With the new changes in the Condominium Property Act, the condo board can recover the cost of the insurance deductible (up to $50,000) if the claim is due to damage originating in the owner's suite. But what if the board decides not to make a claim to prevent rates from going up drastically? Can we recover any of that cost?

For example, a water leak causes $40,000 damage and the deductible is $25,000. We could make a claim and get the owner to pay $25,000, or we pay $40,000 to fix the damage and the owner owes nothing.

It seems crazy to me that this is how it works.

P.S. anti-condo people can hold their comments. Just go back to enjoying your suburban utopia.

[getbak]

It might have to be written into your bylaws, but my understanding is that you can recover up to the cost the deductible even if you don't make a claim.


I looked it up, and this is what my building's bylaws say...

Regardless of whether a claim is made under any insurance policy of the Corporation, if the Board, in its sole discretion and acting reasonably, determines that:

(i) an Owner (or members of his family, his tenants or members of their families, his invitees, contractors or licensees) is responsible for the loss or damage that gave rise to the potential claim; or

(ii) the loss or damage or the cause of the loss or damage that gave rise to the claim or potential claim originated from the Owner’s Unit;

the Corporation may recover the deductible portion of the claim (whether a claim is made or not) from that Owner and such amount shall be recoverable by the Corporation as a contribution due to the Corporation, together with interest thereon as herein provided, for the amount of the deductible and all costs, charges and liabilities associated therewith (including legal costs on a solicitor and his own client full indemnification basis) and with the collection thereof incurred by the Corporation, and such monies shall be a charge upon his Unit to the same extent as it would be if it were a contribution levied against the Unit.

[DownInFlames]

Our bylaws don’t mention being able to collect without a claim but they’re due for an update.

[I-Hate-Hulse]

Originally Posted by DownInFlames

For example, a water leak causes $40,000 damage and the deductible is $25,000. We could make a claim and get the owner to pay $25,000, or we pay $40,000 to fix the damage and the owner owes nothing.

Whoa, hang on. That $40,000 has to come from somewhere, and Boards rarely have $40 large sitting around. As an item of repairs and maintenance, leaks aren't typically items covered by the Reserve fund.

That leaves a special assessment whereby all units of the building would have to proportionately chip in to cover the $40K. Which generally leaves the entire populace ripping mad.

That leaves the ability to collect the $40K directly from the unit that charged it. I'm not a lawyer, but I believe it comes down to your bylaws, and whether it states the offending unit is responsible for 100% of the incident in the event a claim is not filed.

I say that, as the guilty unitholder may have an argument that 'insurance exists for a reason, use it" to only owe the $25K and not $40. Again, it all comes down to the almighty bylaws.

[GGG]

Originally Posted by I-Hate-Hulse

Whoa, hang on. That $40,000 has to come from somewhere, and Boards rarely have $40 large sitting around. As an item of repairs and maintenance, leaks aren't typically items covered by the Reserve fund.

That leaves a special assessment whereby all units of the building would have to proportionately chip in to cover the $40K. Which generally leaves the entire populace ripping mad.

That leaves the ability to collect the $40K directly from the unit that charged it. I'm not a lawyer, but I believe it comes down to your bylaws, and whether it states the offending unit is responsible for 100% of the incident in the event a claim is not filed.

I say that, as the guilty unitholder may have an argument that 'insurance exists for a reason, use it" to only owe the $25K and not $40. Again, it all comes down to the almighty bylaws.

I haven’t owned a Condo in a long time but I thought individual Condo insurance you buy usually as a clause to cover for Damage caused by your unit to other units up to certain amounts. I thought it was up to the deductible of the corporation.

[chemgear]

I sorta recall somebody on CP having a condo, filled a sink with water to wash dishes and then the sink fell/broke off of the counter. Water damage to the neighbor below - not sure how that turned out.

[DownInFlames]

Originally Posted by chemgear

I sorta recall somebody on CP having a condo, filled a sink with water to wash dishes and then the sink fell/broke off of the counter. Water damage to the neighbor below - not sure how that turned out.

I have a vague recollection of that. Wasn’t he from Europe or something?

[Weitz]

Originally Posted by getbak

It might have to be written into your bylaws, but my understanding is that you can recover up to the cost the deductible even if you don't make a claim.


I looked it up, and this is what my building's bylaws say...

This is how things are mostly these days.

Have to review your bylaws though.

[I-Hate-Hulse]

Originally Posted by GGG

I haven’t owned a Condo in a long time but I thought individual Condo insurance you buy usually as a clause to cover for Damage caused by your unit to other units up to certain amounts. I thought it was up to the deductible of the corporation.

That's basically it, but it's to a max of $50,000. Probably the biggest difference is that the offending unit no longer has to be negligent for the Board to come after them for the deductible. Now - if the leak was from your unit, whether you had anything to do with it or not - you're paying up.

This site has a good writeup on the topic.

https://www.lanesinsurance.com/start...ble-insurance/

Faced with a battle with the offending unit that is at best, only willing to pay up to the value of the deductible - most boards just make the claim, and jack condo fees the next year to cover the massive increase in premiums... and the cycle continues.