N.N. from Hartford County, Connecticut writes:
Dear Mister Condo,
Our condo association has a master insurance policy that has a $5,000 deductible. If a unit incurs damage up to $5,000, the association, out of their operating budget, would cover the cost. They are now looking to each individual homeowner to file a claim with their own insurance company thus saving the association dollars. Does this follow Connecticut condo laws and would we have a problem with our own individual insurance carrier? Thank you.
Mister Condo replies:
N.N., high deductibles are one technique for keeping premiums low. I am not an attorney so I offer no legal opinion on whether or not laws are being followed but I will tell you that practice is common and has grown over the years, most notably in the associations where ice damming was common. It was not unusual for larger associations to process dozens of claims in a season, making the deductibles add up quickly. It is not uncommon for the individual homeowner’s policy (HO-6) to cover the individual unit owner’s share so the practice flourished. As far as problems with your individual insurance carriers, I would think that would vary by carrier. Insurers are not stupid and they would certainly have a problem making multiple payments for $5,000 year after year for water intrusion events caused by ice damming or other. I suspect this is an evolving situation but, for now, it is a fairly common practice, in my experience. Hopefully, claims are few and far between. More than ever, it makes the case for unit owners protecting their interests with an excellent HO-6 policy. All the best!