Condo Owner’s Insurance Pays for Deductible on Master Policy With No Claim

J.R. from Middlesex County writes:

Dear Mister Condo,

I had water damage in my condo from my washing machine. I called my personal homeowners policy and they inspected and quoted $8000 worth of damage. But because my condos master insurance policy has a deductible of $5000, my personal insurance will not be moving forward and gave me a $5000 check to give to the condo association and have them put through the claim under there master policy. But now the property manager is telling me he doesn’t want to put through a claim and wants to pay for the damages out of pocket. Is this okay? Do I tell him about the $5000 check? Do I give it to him? Do I tell my personal insurance? Am I going to get in legal trouble for not putting the $5000 check towards a deductible? Are the repairs going to be of less quality? Do I have a right to tell the property manager that I don’t agree? Please help. Thank you.

Mister Condo replies:

J.R., I am sorry you had damage inside your condo. I am not quite certain of why the condo’s Master Policy has come into play here. Was there damage to a unit other than your own? Typically, damage inside your unit is covered by your policy. Damage to the common grounds and/or neighboring units may be cause for a Master Policy claim but not necessarily, especially if the association has published maintenance standards for typical wear items such as laundry line supplies that do fail over time. Regardless, unless the association is making a claim on their policy, the repair can be handled however the association sees fit if they are claiming to have responsibility. Depending on the agreement made between you and your insurer, you may be committing fraud by not letting them know how the true cost of the repair. I wouldn’t be as worried about the quality of the repair as I would about what happens if your insurer finds out. In a worst-case scenario, they could drop you and come after you for any monies that were allocated for the $8000 repair. In this case, they have paid a claim for $5000. Their expectation is that the Master Policy will pay the difference between the cost of the repair and the deductible. Whether or not they ever find out about it is largely up to you and the repair company. Let your conscience be your guide. Good luck!

One thought on “Condo Owner’s Insurance Pays for Deductible on Master Policy With No Claim

  1. Generally the Board with assistance of property manager and insurance agent, set deductibles, unless documents have limits. If your association has a $5000 deductible, their responsibility for repairs is $3000.00, in this case. The question isn’t do you keep the check. The question is do you want to restore your unit? The board is interested in making repairs and restoring. As a Manager and board president for my association for over ten years, the Board can’t move forward with work if a owner holds $5000 deductible. Put your money on the table and use your insurance money for the purpose your insurer intended. In other words, it is not worth the risk or conflict if you do not contribute the $5000 for the purpose intended by your insurance company.

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