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Leaking Air Conditioner Creates a Mess in the Condo; Insurance Coverage even Messier!


J.R. writes:

Dear Mister Condo,

Hi, Mr. Condo, I certainly hope you can help me! The short version is that I had a leak in my condo while I was away on vacation. I live on the lower level of a three-level building. The air conditioning unit owned by the unit owner on the top floor had failed and caused the leak. I called my insurance company, had the cleaning people come out, used fans to dry out the unit, and even took some carpeting out, too. I have engineered wood flooring, on cement, and carpeting in that area, approximately 700 sq ft. all of it, wood and carpet must be removed and replaced, and of course the ceiling and a few walls. My insurance company told me that the condo’s insurance master policy is primary over mine. My management company is playing hardball on the replacement of the wood and carpet. They state the estimate for this is approximately $2,200.00, which my floor guy thinks is just crazy. They state it’s my responsibility to “move” my personal property, which as we all know the installers will be doing. They state that I must use their contractor who won’t contact my floor guy at all. My floor man thinks $2,200.00 is just not a true amount to do the job. It’s been 2 months and this back and forth is bugging me. I can’t understand the statute and found your website! Am I obligated to use their people and like materials to replace what I have? How do I challenge this further? Their estimate is ridiculous and won’t include the moving and disposal, etc. of what is coming out. Thanks, J.R..

Mister Condo replies:

J.R., that is no way to end a vacation! Coming home to find your home damaged and then having to deal with the rigmarole of insurance companies and contractors that may or may not meet your needs and requirements is enough to cause you to need another vacation. I am sorry for your worries but let’s discuss what options you may have.

Who pays for the repair is really at the heart of the matter here. If your association’s Master Policy is being used then you may be limited in your choices. The management company is simply handling the business of the association here so please don’t think of them as “playing hardball”; their hands are tied, too. The Master Policy likely includes replacement of either the originally installed materials or upgraded materials that were installed after the original build. This is a tricky part of the insurance regulations so be sure to ask what is covered if it isn’t made clear to you. You may need to speak with a representative of the insurance policy underwriter to get this information or your property manager may have an answer. The insurance company is under no obligation to work with your contractor. In fact, they will likely have their own company in mind or may bid the work out to the lowest bidder. Their only obligation is to restore to either original materials or “like kind” if the upgrades are covered.

Next up is your own homeowner’s insurance policy (in Connecticut, that’s known as your HO-6 policy). Even though the association’s Master Policy is being used as the primary insurance, you may have some additional coverage under your own policy. Only you and your insurer can answer that question by thoroughly reviewing your policy. One example might be that the Master Policy covers the basic repair and the HO-6 policy covers the upgrades. It is a bit confusing but the insurance claims folks are not unfamiliar with this type of claim.

Finally, there is the nastiness of deductibles. Even if one or more of the policies covers the damage, you may still have a deductible. Also, you have a preferred contractor that you would really like to use. My advice would be to find out what it would cost from your preferred contractor to get the unit back to your specifications. Since you have said that he thought the estimate of $2,200 was not high enough, I am guessing that he is thinking more in the $3,000 to $3,500 range. If it is that important to you that he be the contractor who performs the repair, you could ask for the $2,200 from the association’s insurance company and pay the difference to your preferred contractor. You might also be able to claim a portion of the difference against your HO-6 policy if that coverage was included when you bought your policy.

The bottom line is that you want your home restored to the condition it was in before you left for your vacation. Provided you are willing to put some of your own money out to bring in the contractor you want, that shouldn’t be an issue. However, if you are going to rely on the insurance company hiring a contractor and paying for the job in its entirety, you will not have a say in who does the job or whether they include moving your existing furniture so they can access the damaged areas. I’m ready for a vacation just thinking about it. All the best!

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