HOA and Condominium Association Claims

A storm damages a condominium building. Two policies exist — the association's master policy and each owner's unit policy — and both insurers point at the other.

Association claims are among the most tangled in property insurance, because the question of who owns what damage has to be settled before anyone can be paid.

We're Insurance Claims Consultants. This page explains where the boundaries fall and where these claims stall.

Call (864) 497-2151. First conversation is free.

Where the Boundary Falls

The dividing line between the master policy and a unit owner's policy is set by the association's governing documents, not by common sense. Three arrangements are typical:

Bare walls. The master policy covers the structure to the unfinished surfaces — studs, subfloor, ceiling joists. Everything inward is the owner's: drywall, flooring, cabinets, fixtures.

Single entity, or "walls in". The master policy covers the original construction including built-in fixtures. Owner improvements and personal property remain the owner's.

All in. The master policy covers original construction and fixtures throughout, leaving the owner responsible mainly for personal property and improvements they made.

Which applies is written in the declaration and bylaws. Very few owners have read them, and the answer determines who claims what.

Where These Claims Stall

• Both insurers deferring. The master policy says it's the unit owner's, the unit policy says it's the association's, and nothing moves. This is the most common failure and it's usually resolved by establishing what the governing documents actually say.
• The master deductible. Association deductibles are often very large, and many governing documents allow the association to assess that deductible back to owners. An owner can find themselves billed for a share of a deductible on a claim they didn't make.
• Loss assessment coverage. Unit policies often include a small amount of coverage for exactly that assessment — frequently far less than the assessment itself, and frequently forgotten.
• Damage crossing the boundary. Water entering through a roof the association maintains, damaging finishes the owner insures. Both policies respond, and coordination between them falls to nobody by default.
• Smoke from a neighbouring unit. An owner with no fire in their own unit still has a genuine loss, and often a difficult claim.
• Board inaction. Common-element claims are the board's to pursue, and boards are volunteers with day jobs. Claims stall for months for no better reason than that.

If You're on the Board

A large common-element claim is a fiduciary matter, not just an administrative one. Owners are entitled to expect it to be pursued properly.

Points worth attention:

• Scope the whole property. Storm damage to a multi-building community is routinely scoped building by building, and buildings get missed.
• Check whether the master policy is replacement cost. Actual cash value on a large community leaves a shortfall that becomes a special assessment.
• Ordinance or law coverage matters more here. Older communities rarely meet current code, and rebuilding triggers it across many units at once.
• Document before remediation. Contractors move quickly after a storm, and evidence disappears with the debris.
• Communicate with owners. Most disputes between boards and owners after a loss come from silence rather than disagreement.

If You're a Unit Owner

• Get the governing documents. You're entitled to them, and they determine what you can claim.
• File your own claim regardless. Waiting for the association to resolve its position can run down your own notice deadline.
• Check your loss assessment coverage and what its limit is. Raising it is usually inexpensive.
• Document your improvements. Upgrades you made are usually yours to insure and yours to prove.
• Keep records of any assessment levied after a loss — it may be claimable.

How We Help

When you hire us, we take the claim off your hands. We establish what the governing documents actually allocate to whom, scope the full extent of damage across a community rather than building by building, and stop the two insurers deferring to each other.

We act for associations and for individual unit owners. On a claim where both are involved we'll tell you plainly if we can only properly represent one.

Anywhere in North Carolina, South Carolina or Georgia, call (864) 497-2151.