Claim Examples – Condominium Associations

Here are several realistic examples of condo association insurance claims, categorized by type, to help illustrate when the association’s master policy would respond:

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Property Damage Claims

1. Fire in a Common Area

• Scenario: A fire starts in the building’s laundry room and causes smoke damage to nearby hallways and units.
• Claim: The master policy covers repairs to the laundry room and affected common areas. Damage to the interior of units may also be covered depending on the policy type (All-In vs. Bare Walls). Owners’ personal contents would be covered by their HO-6.

2. Roof Damage from a Storm

• Scenario: A severe storm tears shingles off the roof, leading to water intrusion in top-floor units.
• Claim: The master policy pays to repair the roof and structural water damage. Individual unit owners would need to file under their HO-6 policies for damaged contents or interior finishes not covered by the master policy.

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Water Damage Claims

3. Burst Pipe in a Common Wall

• Scenario: A pipe shared between two units bursts and floods both apartments.
• Claim: The master policy typically covers structural damage (walls, insulation), while unit owners’ HO-6 policies may cover flooring, personal belongings, and potentially interior walls/fixtures depending on the policy type.

4. Sprinkler Malfunction

• Scenario: A sprinkler head malfunctions in the hallway, damaging several unit doors and adjacent carpeting.
• Claim: The master policy covers the common area damage and doors (if defined as common property). Unit owners may need to use HO-6 for any affected contents inside.

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Liability Claims

5. Injury in a Shared Space

• Scenario: A guest slips on a wet tile in the building’s main lobby and fractures their wrist.
• Claim: The master policy’s liability coverage pays for medical expenses and legal costs, as the injury occurred in a common area.

6. Playground Accident

• Scenario: A child is injured while using a poorly maintained swing set in a community park.
• Claim: The association’s liability insurance would respond to a personal injury lawsuit or settlement.

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Structural Defects or Collapse

7. Stucco Detachment

• Scenario: A large portion of exterior stucco falls due to long-term water infiltration and lack of maintenance.
• Claim: The master policy might cover repairs depending on whether the cause is sudden and accidental. Deferred maintenance is typically excluded, leaving the association to pay out of pocket.

8. Foundation Shift

• Scenario: Poor drainage causes the building’s foundation to shift, cracking walls in multiple units.
• Claim: The master policy may cover damage caused by a covered peril (like a sudden collapse), but earth movement is often excluded unless optional coverage was purchased.

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Loss Assessment Scenarios

9. Windstorm Causes Widespread Damage

• Scenario: A storm causes $1 million in damages, but the master policy has a $250,000 deductible.
• Claim: The association covers the deductible by assessing each unit owner. If owners have loss assessment coverage in their HO-6, it may help reimburse their share.