Water Damage and Plumbing-Related Claims: What Condo Associations Need to Know

Water damage is one of the most common and expensive insurance issues facing condo associations today. From burst pipes to overflowing appliances, even small leaks can lead to big problems—especially in multi-unit buildings where damage can quickly spread.

In this post, we’ll explore why water damage is such a concern, what’s typically covered by insurance, and how condo associations can reduce risk and avoid costly claims.

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Why Water Damage Is a Big Deal

Water damage doesn’t just ruin floors or walls—it can result in:

• Mold and indoor air quality problems
• Displacement of residents
• Legal disputes between unit owners and the HOA
• Spiking insurance premiums

Condo buildings are particularly vulnerable due to their shared infrastructure, aging plumbing systems, and stacked living spaces.

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Common Causes of Water Damage in Condos

Here are the usual suspects:

• Burst or leaking pipes (especially in winter or older buildings)
• Toilet or sink overflows
• Leaky appliances (like washing machines or dishwashers)
• Water heater or HVAC failures
• Roof leaks or poor drainage
• Improperly sealed windows and balconies

Any of these can damage multiple units and common areas in a matter of hours.

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What the Master Insurance Policy Covers

Your condo association’s master insurance policy will typically cover:

• Common area damage (hallways, roofs, shared plumbing)
• Sudden, accidental events like a pipe bursting in a wall
• Some structural repairs

But it won’t cover:

• Gradual leaks or maintenance issues
• Mold due to long-term neglect
• Unit owner property or improvements

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What Owners Need from Their HO-6 Policy

Unit owners should carry a HO-6 condo policy, which usually covers:

• Interior finishes (floors, cabinets, etc.)
• Personal belongings
• Temporary housing (loss of use)
• Optional water backup and loss assessment coverage

It’s important for owners to review these policies regularly—especially if they’ve made upgrades or live in an older building.

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Who’s Responsible When Things Go Wrong?

One of the most difficult parts of water damage claims is figuring out who pays. Scenarios might include:

• A leak from a unit damages a neighbor’s ceiling—is it the unit owner, HOA, or both?
• A roof leak damages multiple units—does the master policy cover all repairs, or just part of them?
• A long-term drip from an owner’s water heater causes mold—was it preventable?

To avoid disputes, associations should have clear policies in their governing documents and maintain open communication with owners.

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Best Practices for Associations

To reduce risk and improve your insurance position, consider:

✅ Regular Plumbing Inspections

Check common systems, water heaters, and roofs routinely.

✅ Water Detection Devices

Install leak detectors in mechanical rooms and suggest them for units.

✅ Owner Education

Send reminders about appliance maintenance and insurance needs.

✅ Clear Governing Documents

Update your bylaws and CC&Rs to clearly assign repair and insurance responsibilities.

✅ Work with an Insurance Pro

Partner with an experienced broker who understands condo risks and can guide your coverage decisions.

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Insurance Trends to Watch

Insurance companies are tightening up when it comes to water claims. Expect to see:

• Higher deductibles or sub-limits for water damage
• More requests for loss prevention measures
• Greater scrutiny of older buildings

Now more than ever, condo associations need to be proactive.

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Final Thoughts

Water damage might be unavoidable—but being unprepared is not. With the right insurance, maintenance plans, and policies in place, your association can protect itself from both financial and legal headaches.

Need help reviewing your current water damage coverage? Reach out to your insurance professional for a risk assessment or policy review tailored to your building.