Condo Media - February 2017 - 51

self-fund the remaining expenses out
of their operating fund. The damage
to unit A estimated at $2,000-$3,000
while unit B suffered $10,000+ in
damages. The two homeowners separately filed their own claims, where
unit B informed their agent/adjustor
that as the bylaws stated, unit A would
be responsible for the entire $10,000
deductible and that the association
would cover the rest. Because the
board made the determination that
a claim would not be filed, the two
unit owners were left to manage their
own claims separately. While the unit
owners shared contact information
for their adjustors, each adjustor went
about their effort separately.
MISUNDERSTANDING AND
MISCOMMUNICATION
When all was said and done, the two
claims were settled by the respective insurance carriers without ever contacting
the neighboring unit owner's representative. Unit A owner paid the $500 deductible on their HO6 policy and the carrier
paid the remaining $2,500. Unit B owner
paid their $500 deductible and their
carrier paid $9,500 toward the damages
incurred, which totaled $12,000. The
association then paid the remaining
balance, which was lower than it should
have been due to the two adjustors managing the claims separately. Because the
incident initiated in unit A, unit B owner
again pushed their adjustor to subrogate
against unit A as the bylaws stated. They
were concerned about their future premiums being affected due to such a large
claim that was not their fault and clearly
initiated in the neighboring unit. The
board directed the managing agent to get
involved to resolve the dispute, working
with the two unit owners' carriers as well
as the association's representative, especially considering it was this representative that helped draft the amendment to
their documents.
In the end, all three carriers agreed
that the situation was not handled or
communicated well from the beginning
and that the end result would not match
up to what the community's amendments stated. While the homeowner

would be responsible for the amount up
to the master policy deductible-even
though a claim was not filed-the two
affected owners should have split the
deductible based on a percentage of
the total damage incurred. The reason
stated by all three carriers was that they
do not legislate blame, regardless of
what an association's documents state.
And making unit A responsible for the
entire deductible would indeed be casting blame in this situation. Because the
repair breakdown was roughly 20 percent for unit A and 80 percent for unit
B, unit A should have been responsible
for $2,000 toward the deductible while
unit B should have been hit for $8,000.
And as stated, the association should
have been responsible for the balance.
Unit B remains understandably upset
due to the large claim history they now
have, potentially affecting future premiums. More so, the community owners
were told one thing by the master policy
holder's agent, and approved a bylaw

change, that it turns out goes against
the industry's own policy. Thus other
owners could be negatively affected by a
similar event.
The current ownership has been
made aware of this situation, but the
reality is that the legal documents of
the association say one thing, but are
not applicable by law, or at least by the
jurisdiction of the insurance industry.
Moving forward, the board has agreed
it would appoint the managing agent
to oversee all future claims, including
those not filed against the master policy.
The hope is that the agent will manage
the multiple claims as one, to ensure
that each unit owner is only assessed for
their portion of the total claim.

n DAN CHASE IS A COMMUNITY
MANAGER WITH TPW MANAGEMENT
IN VERMONT.

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February 2017

Condo Media - February 2017

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