There are thousands of homeowners associations (HOAs) and condominium associations throughout Florida. The size and responsibilities of these groups may vary from community to community, but most of them maintain some type of insurance policy to protect their assets.
Due to some of the extreme weather like hurricanes or flooding in certain parts of the state, insurance policies can be extremely important to HOAs and condo associations. These groups can pay significant premiums for the following forms of protection:
- Damage to property – This type of policy would serve to protect the utilities, property, and common areas shared by the HOA or condominium association community. In the event of a fire, flood, hurricane, or sinkhole collapse, a property damage policy would pay for the cost of repairs that can easily run into the millions of dollars.
- criminal damage – This policy might protect an HOA or condominium association from graffiti, vandalism, or arson, but certain criminal policies can also serve to protect the association from fiduciary mismanagement by a board member or other official. These policies are sometimes called fidelity insurance.
- Liability claims – A person who is injured by a slip and fall accident, equipment malfunction, or violent crime on the property of that HOA or condominium association may file a premises liability claim. This type of insurance policy can help cover the cost of settlements in such cases.
While insurance for an HOA or condominium association can be expensive, it’s generally considered a worthwhile investment. However, many boards of such associations are surprised when insurance companies fail to provide adequate compensation after a claim is filed. Some of the common issues HOAs and condo associations face when filing an insurance claim include:
- delayed payment – Florida Statute § 627.70131 specifically states that an “insurer shall pay or deny such claim or portion of a claim” within 90 days of receipt of notice of an “initial, reopened, or supplemental property insurance claim of a policyholder,” but allows Insurance companies some wiggle room if “nonpayment is caused by factors beyond the insurer’s control.”
- claim denial – There can be various reasons for a claim to be denied, including but not limited to lack of evidence, certain accidents not covered by certain policies, or policies canceled because premiums were not paid on time.
- Improper settlement amount – The insurance company may undervalue a claim and offer an amount significantly less than the actual cost of the damage.
- Negligent defense provided in liability claims – In certain general liability claims, an insurance company could leave the policyholder stuck with a settlement that exceeds the policy limits.
Insurance companies investigate claims to limit their own payouts and find reasons why claims fall into exclusions that are not covered by certain policies. An HOA or condominium association does not have to simply accept these types of results. An experienced attorney can negotiate to seek a more favorable recovery or sue the insurance company if it does not provide a satisfactory amount.