Boards and associations, just like individuals, carry insurance coverage to protect them from liability, loss and other financial and legal problems, although the issues may be a little different than the typical auto or single-family homeowners’ insurance. However, when, and if, to file a claim versus paying out of pocket is always not easy to determine.
Whether it’s for property damage or an injury on the premises, paying a claim can be very expensive. However, a history of claims, frivolous or otherwise, can cause a building or association to pay higher premiums and, in extreme cases, to be dropped from its insurance policy entirely.
What are the main criteria and a co-op, condo or HOA development should consider when deciding whether or not to submit an insurance claim?
Weighing the Claims
“Claims in a multi-unit property are complex, to say the least,” says Sharon Robles, president of the Sharon Robles Agency in Chicago, “and this is where your insurance adviser comes in handy. Always consult him or her prior to filing a claim. Before filing a property damage claim, the association should carefully consider their deductible in relationship to the damage. If you are not sure as to the extent of the damage, get an estimate. If the damage is less than the deductible, you may not want to file a claim.”
Sherry Branson, marketing project manager for Kevin Davis Insurance, a national firm that serves Illinois, says “Community associations are liable for insurance claims in many areas: board elections, contracts with vendors, association finances, and employment issues, are just of the few areas where they can be sued.”