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My Insurance Company Won’t Pay My Condo Claim

My Insurance Company Won’t Pay My Condo ClaimIf you purchase a condo, your insurance policy coverage is unique because you have purchased interest in a property of homes. You now share joint ownership of the building with other tenants. The property is controlled by a Homeowners’ Association, while you own the walls around your home and pay for the upkeep of the amenities within the complex.

This type of arrangement makes it difficult at times to determine who should file insurance claims for property damage and other types of disasters. There may be times where you are not sure whether you should file insurance claims under your own condo insurance or the Homeowners’ Association master policy.

What is condo insurance?

Condominium insurance is an insurance policy that covers any incidents that happen within the walls of your condo. This means that you are covered for any injuries that a person endures inside your condo, as well as any damage to your personal property. Should your condo happen to be burglarized, your insurance policy covers the costs of your personal property. Even if you happen to set your microwave on fire, you can submit a claim for a new microwave under your policy.

What is the master policy?

The master policy is the insurance that is held by your Homeowners’ Association or your condo board. This coverage is typically carried by these organizations to protect themselves against liability and other legal concerns. Under this type of policy, any damages done to the structure of the building and the common areas of a condo are covered. For example, if there is a broken AC unit that distributes air throughout the complex, the master policy is responsible for repairing the AC unit. If the roof is damaged, the master policy covers the repairs.

Why are condo association claims denied by insurance companies?

Two of the primary reasons why your insurance company would not pay your condo claim are:

  1. The damage your condo sustained is not covered under the policy. Like any insurance, condo insurance limits what you can claim. Under all-in policies, there are some parts of your condo that are covered, such as plumbing, appliances, flooring, and electrical. Under bare-walls-in policies, anything within your four walls is not covered. If you don’t have the right policy, your claim can be denied. It can also be denied if you don’t have enough coverage.
  2. The damage sustained is covered under a different insurance policy. If you make a claim for something that is covered under the master policy, you can be denied. This is why it’s so important to know just what your policy covers.

The best way to determine what your building’s master policy will and will not cover is to request a copy of the master policy and the association by-laws, preferably when you move in. You’ll also want to provide a copy to your insurance agent as well, so he or she can help provide the best policy that can fully cover all potential damages to your condo.

What types of insurance claims do Homeowners’ Associations file?

Although each master policy varies, some of the common insurance claims that the organization files include storm and hurricane damage, water damage, fire and smoke damage, broken water heaters, roof damage, and broken sprinklers. Insurance claims typically include coverage for structural damages to the buildings, gutters and skylights under roof damage, damage to the common areas, and general liability for the association.

How do insurance companies act in bad faith with condo claims?

Insurance companies are guilty of acting in bad faith when the insurance adjusters attempt to backtrack on their obligations to their clients. Insurance adjusters can accomplish this action by either refusing to pay your legitimate claim or failing to investigate and process your claim within a reasonable time period.

Making unreasonable demands on you to prove the validity of your loss is another way that your insurance company practices bad faith against you. If you and your insurance adjuster have a difference of opinion in regard to the amount of your loss, that is not an example of an insurance adjuster acting in bad faith; neither is making a mistake. If the insurance adjuster refuses to provide you with substantial support for their decision, however, that can constitute an example of bad faith.

Other examples of bad faith include:

  • Denying coverage with no explanation
  • Misrepresenting the facts of the investigation OR your policy coverage
  • Claiming the damage should be covered under a different policy
  • Refusing to pay for replacement value when it is covered
  • Demanding you sign a release form before the damage is fully addressed
  • Threatening you with a lawsuit
  • Refusing to put the reasons for the denial in writing

If you’ve lost everything, partner with a law firm that will put your best interests first. To speak with a highly respected insurance dispute attorney about your losses, call Warhurst Law at 251-207-1296, or complete our contact form to schedule an appointment. The Warhurst Warriors represent condo owners and homeowners’ associations throughout Mobile, Alabama, the Gulf Coast, the Panhandle, and across the Southeast.