Condo owners should buy secondary insurance

Posted: Aug. 11, 2012 | 2:04 a.m.

Q: I currently own a condominium that I rent to my granddaughter. Last Sunday, the girl who lives in the condo above mine called me and said she heard running water, and asked if would come over and see if we could figure out where it was coming from. I went over and we looked in all the storage units and all around the complex. I checked my condo and you could hear the hissing there, too. I notified the president of the homeowners association and told him that we could hear the water but could not find it. He said he would notify the management company.

I heard nothing more about it until my granddaughter called me Tuesday and said the kitchen floor was extremely hot. I went over and sure enough, about 2 feet into the kitchen, the floor gets really warm. I again called the HOA president and he came over.

On Wednesday, a plumbing company came over. We found that the girl above my condo apparently had a leak in the line and it was under my kitchen. The plumber said that since it was her water heater, she was responsible for the fix. She happens to have a home warranty . They informed her the leak was in the wall, and it was up to the HOA to fix it.

Then, I got a call from her other insurance company, which informed me that since it was my unit that was damaged, I had better call my insurance company to come fix it.

Again, I called the HOA president, and he said they would check it out. I also called my insurance company and it has started an investigation.

In the meantime, my unit is being damaged by all this water under it . I have visions of the whole unit sinking. Anyway, my question is: How do I get someone to do something about this before mold and all other kinds of damage happens. I understand the leak is in the foundation but it is coming from her water heater.

A: Since you have secondary insurance on your unit, the quickest way your damages will be addressed is to place a formal claim with your insurance policy. In addition, you should obtain the name of your association’s insurance agent and forward that information to your agent. Your insurance company can make a decision if it wants to subrogate the claim against the association’s policy and even recover your deductible that you will have to pay for your claim. You are fortunate to have purchased your secondary insurance policy.

Q: This is a question on insurance. Specifically, how homeowner insurance works with the HOA deductible.

When I purchased my condo the insurance agent made a point of talking with me about deductible coverage related to an HOA problem. I honestly didn’t pay too much attention.

Not long ago there was a water leak in the shared exterior wall of another building that resulted in interior damage to one unit. The break was on the HOA side of the pipe. Ultimately, the condo had to have new hot water lines. The HOA has a $3,000 deductible.

Is this when the homeowners insurance coverage kicks in? Would it pay the $3,000 deductible? And what if a homeowner doesn’t have homeowners insurance? We live in a 20-year-old complex and I’m sure it’s just a matter of time before something like this happens to me.

A: You purchased secondary insurance. This column has stressed the importance of condominium and townhouse homeowners obtaining this kind of policy.

If this had been your home, you would have contacted both the association’s insurance company, which by law is considered the primary insurance carrier, and then your insurance agent . You would have had to pay your deductible on the secondary insurance, which probably is around $250 or $500. Your secondary insurance policy would cover the association’s deductible as well as any other covered damages the primary insurance policy does not take care of, including personal property as well as any upgrades to your unit.

Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to Association Q&A, P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759, or she can be reached by email at [email protected] Holland is also available to speak at your organization or company.


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