Reader responds to our take on condo owner’s insurance denial

What the owner in the column refers to as a pipe bursting is a virtual impossibility. Sewer line pipes are gravity fed. What more than likely happened is that the cast-iron sewer pipe had a spiral crack around it. Only steam, fire sprinkler, or potable water pipes are subject to bursting because they operate under pressure. On that basis, the claim was wrongfully denied.

The next issue to be aware of is that under Florida law, any component that serves two or more units is a responsibility of the owners association. It can easily be demonstrated that this pipe serves more than one, or adjacent, units. The unit owners perimetrical boundaries are described in the declaration of condominium at the time of formulation of the condominium.

It is very clear that anything outside of the outer perimeter of the horizontal plane of the ceiling or floors, or the vertical plane of the walls outside of the boundaries of the unit owned by the unit owner, are owned by the condominium association. Finally, the proximate cause of this damage was the failure of this association component. If not for the failure of such a component, the owner would have no damage in their apartment.

Based on the foregoing, I would resubmit the claim to the unit owners insurance company along with the declaration of condominium, which will show that the unit owner did not own the pipe that failed. I would also file a claim with the condominium association’s insurance company for failure of the component.

If the association insurance company denies the claim, then I believe the declaration of condominium will point toward this loss as a responsibility of the building. Therefore, the damage is to be paid out of common association funds.

A: Thank you for your extended explanation on our column. We agree that this homeowner should attempt to get their insurance carrier to cover their water damage. We suspect that unit owner’s insurance carrier may have denied the claim to avoid having to pay the claim.

We like the way you explained the issue of the location of the pipe in relation to the owner’s unit. We, too, believe that the pipe was a common element pipe — meaning the pipe that caused the problem was a pipe that served multiple units and was the obligation of the association to maintain and repair.

However, at issue was this homeowner’s insurance company’s statement that the owner failed to buy an endorsement to the owner’s policy to cover backup sewer and sump pump coverage. As we discussed in our column, we don’t think that endorsement would have changed the fact that the water came from a pipe outside of the owner’s unit and that, whatever that cause, the basic policy should have covered the homeowner.

Had the upstairs unit owner caused the damage to the reader’s unit due to a blocked toilet or sink that spilled over, we suspect this insurance company would likely try to avoid paying on that claim as well. The unit owner should go back to their insurance company and resubmit the claim or hire an attorney to go after the insurance company for failure to pay on a claim covered by the policy. We talked to a large insurance broker who thought that this type of claim would be covered by the typical condominium policies they see.

We do want to clarify one of your comments. You mentioned that the condominium association should cover the cost of the repairs to the unit whether or not the association’s policy covers the loss. We’re not sure it would work that way. There is a reason that associations require homeowners to carry insurance over their units and their belongings. The association does not want to be the ultimate insurer for anything that goes wrong in a building, especially if the association’s insurance does not cover the issue.

If, on the other hand, the association’s insurance can cover the issue, we don’t disagree that the association’s insurance carrier should then pay out on the claim. However, in the question we received, the association’s insurance carrier stated that they don’t cover the interior of the units. The association or the insurance carrier would cover any damage to the common elements and the exterior wall of the unit, but not the contents and not the kitchen cabinets and the floors.

We agree that the reader should reach out again to their unit’s insurance company and demand coverage under the policy. They should not accept the insurance company’s representative’s answer that the policy didn’t cover the issue. If that doesn’t work, talk with an attorney to explore your options.

(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, a financial wellness technology company. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)