What to know when your homeowners association
files an insurance claim
Article Courtesy of The South Florida Business Journal
By The Morgan Law Group, P.A.
January 11, 2020
If your home or condominium is part of a homeowners
or condo owners association, the insurance coverage that is designed to
protect your building or community is complex – in both the language and
in the details.
The small print that exists within the insurance coverage can often lead
to delays or denials in financial recovery when a claim is submitted by
the HOA, simply because it’s easier — and cheaper — for the insurance
company to avoid payment than it is to write a check for the damages.
Insurance companies are masters at manipulating policy language to
benefit their bottom line. And while it’s unfair, it is common.
What types of HOA insurance claims can the HOA and condo associations
Storm and hurricane damage.
Fire and smoke damage.
Broken water lines.
Broken water heaters.
Damage to common areas including elevators,
lobbies, swimming pools, and parking covers.
Make sure you review the HOA bylaws and the
individual unit owners’ policy to understand who is responsible for the
When your HOA submits a claim, it is important to review and understand
the bylaws to determine who is responsible and what coverage is
HOAs provide bylaws which are governing guides. The bylaws should cover
things like how often you have meetings, how many people are on the
board, how often membership meetings are required, and what defines
common elements of the building, versus individual unit owner’s
Additionally, the HOA provides hazard and liability insurance, as part
of the unit owner’s monthly condo dues. The policy covers common
elements and shared features such as the roof, exterior structure and
amenities, like the pool and gym.
On the other hand, individual unit owners have their own condo
insurance, also known as an HO6 insurance policy. This provides condo
unit owners coverage for their own properties, belongings, and
everything within the walls of their individual unit. It also protects
against liability claims and helps cover the costs if the unit is
Why would the insurance company dispute the HOA’s claim?
When homeowner’s associations, condominium associations, and townhome
associations file property damage claims, it is typically because
structural damage to multiple condos, units, roofs or common areas has
Disputes often arise between HOAs and the insurance company after the
insurer denies a valid claim, many times without a legitimate reason or
Since the insured losses in these cases can also affect the structural
integrity of the building in some cases, the claims process may be
complicated. And when the damages are extensive, so is the difficultly
in accounting for, substantiating, and covering all insured losses.
Insurance companies use the complexity of these insurance claims against
the policyholder, which can drastically affect the pace and outcome of a