Can I sue my condo association for not having insurance? Living in a condominium is such that, in many cases, some responsibilities are the condo association’s to make and not the owner’s.
The property and the shared spaces are protected from damage, so residents don’t have to pay for repair or liability costs out of pocket.
What if your condo complex doesn’t have the insurance you need? This post will explore what insurance might cover for the typical condo and how you should respond when an association is underinsured or uninsured.
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Now, let’s get started.
What Happens If A Condo Association Doesn’t Have Insurance
When a condo association doesn’t buy insurance, owners could be left at risk of severe financial losses.
However, without insurance, you will not have protection for repair costs, damages to the parts of the property shared by multiple unit owners, and claims of negligence in accidents on the property.
This could mean that:
Owners May Face Out-of-Pocket Expenses: Some areas, including the lobby and elevators, are jointly owned, and if they are damaged, all unit holders would have to pay for the extra repair expenses.
Legal Liabilities Increase: If people get hurt in a shared space without insurance, they could face lawsuits that will cost them.
If the association has no money to pay the bill, condo owners could be partially on the hook.
Property Value Can Decrease: Insurance covers repairs and is a safeguard to the value of a condo. The property may depreciate without it, and all the owners’ investments may be at risk.
Condo owners know these risks and can sue the association for not fulfilling its insurance duties.
Are Condo Associations Legally Required To Have Insurance
However, in most cases, condo associations must have certain types of insurance, though what kind of insurance is needed can vary from state to state and the association’s governing documents. Typically, most condo associations are expected to have:
Property Insurance covers damage to the building’s structure and common areas, including the hallways, lobbies, and shared standard amenities.
Liability Insurance: It covers if someone is injured on common property.
Fidelity or Crime Insurance: For some associations, insurance is needed to protect the association from fraud or theft by board members or staff.
Most state laws, for example, those in California, Florida, and New York, require insurance for condo associations.
In addition, most condo association bylaws contain some specific insurance requirements. If the association isn’t fulfilling these legal obligations, condo owners can sue the association.
How Can I Find Out If My Condo Association Has Insurance
To determine if your condo association has insurance, you can follow these steps:
Review the Association’s Bylaws: These associations outline their insurance responsibilities clearly in their governing documents, which are available to all members.
Request a Copy of the Insurance Certificate: Members should request a copy of the certificate of insurance and verify coverage from the association.
Ask the Board Members or Property Manager: If you’re nervous, ask the board or property management about the current insurance situation and possible gaps.
Check Annual Financial Statements: The coverage is outlined in the association’s budget and is often reported as insurance premiums on financial reports.
Checking if they’ve confirmed their insurance coverage can help you determine whether they’ve done their job.
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Can I Sue The Condo Association For Negligence
Condo owners may, in some cases, sue the association for negligence if a lack of insurance causes them financial loss.
To prove negligence, you are generally required to show that the association breached its duty to protect members and that such breach caused you to suffer damages.
Here are situations where negligence might apply:
Failure to Obtain Required Insurance: If the condo association fails to secure the mandatory insurance, it will be liable for damages arising from negligence.
Ignoring Maintenance Issues: Bad maintenance often goes hand in hand with a lack of insurance. The association may be liable if a known issue, such as structural damage, causes an accident and fails to repair and insure the property.
Inadequate Response to Risk: Condo associations must deal with risks in common areas. Say a common area is destroyed by extreme weather beyond the association’s coverage, and the owner argues that the association acted negligently because it didn’t have enough insurance.
Legal counsel can also help you to decide whether you have a case for negligence in your situation.
What Damages Can I Claim In A Lawsuit Against My Condo Association
We want to point out that you can sue the association, but ensure you are armed with sufficient evidence.
If you use them, you can claim several costs associated with the condo association’s failure to maintain insurance. Possible claims include:
Repair Costs: You can get repair costs no thanks to the condo association’s negligence; this means that if, for instance, your unit or the association’s common areas are ravaged by a storm or fire, you can seek compensation for repair or rebuilding costs.
Lost Property Value: Inability to be insured can reduce the value of a property.
Association action might claim owners’ depreciation in their condo value.
Out-of-Pocket Expenses: You could claim expenses that you would have been obliged to pay for maintenance or repairs that would usually be paid by insurance.
Legal Fees: In successful claims, legal fees are often recoverable, mainly where the association’s negligence is established.
The amount of damages each claim provides depends on your situation; an attorney can help determine what claims you might be entitled to.
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What Should I Do If My Condo Association Is Uninsured
If your condo association doesn’t have insurance, proactive steps can serve to protect your investment and suggest to them that they act responsibly.
Address the issue with the Board: If you raise your concerns in a board meeting, you can ask the board to explain the decision while requesting immediate action to put in place coverage.
Seek Mediation or Arbitration: Before pursuing a lawsuit, consider mediation or arbitration, which are like family counseling and don’t involve the court.
Consult a Lawyer: If the board doesn’t act, find an attorney who does condo law and can give you an idea of your rights and the best way to go.
Form a Group with Other Owners: If you can get other concerned owners who are also, you can add weight to your request and pressure the board to act.
By taking these steps, you can deal with this before it escalates to legal action, which can be costly and time-consuming.
How Can I Protect Myself if My Condo Association Is Uninsured
If your condo association remains uninsured despite your efforts, there are measures you can take to safeguard yourself:
Purchase Individual Condo Insurance: You can purchase individual condo insurance to protect yourself against liability claims or damages to your unit.
Consider Umbrella Coverage: If your association doesn’t have insurance or their insurance exposes you, an umbrella policy can supplement your insurance.
Document All Interactions: Record communications with the board and any effort you make to resolve the insurance problem. That documentation is valuable should legal action be necessary.
Stay Informed: Attend association meetings and follow to find out what matters to insurance and property maintenance.
If the condo association neglects itself and its insurance duties, protecting yourself will lower your vulnerability.
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Conclusion
It’s the duty of condo associations to be adequately insured to protect property values and residents.
If your condo association does not have this coverage, which is vital, you may have cause to sue for negligence if the consequences are financial.