B.B. from Collier County, Florida writes:
Dear Mister Condo,
My condo association received funds from an insurance claim filed regarding hurricane damage. Included in the claim were windows, a roof, and various other items. If the association wants to use some of the funds received in the settlement to purchase new windows for all owners but some owners had already purchased them in the last 10 years on their own, how does the association handle those owners that don’t want new windows but want some sort of reimbursement?
Mister Condo replies:
B.B., I am sorry that your association took so much damage. I am glad the damage was an insured loss and that the association now has the funds to make the repairs. I trust and hope that no one was injured during the storm(s). Once the funds are disbursed to the association, it is incumbent upon the Board to make sure the repairs needed are made. Any funds left over are somewhat to be used at the Board’s discretion. I am not sure I understand how claims were made for windows that weren’t damaged or are not being repaired but that is a discussion for another day. The insurance money is “found” money for the association. It was not budgeted, it didn’t go to replace the Reserve Fund as the Reserve Fund wasn’t used to make any repairs (if it was, that money should go back to the Reserve Fund). I would think that the Board, as the elected representatives of the association, would make the decision to use the money how it best serves the community, including saving it for the next “rainy day”. One word of caution – if the insurer gets wind that they paid more than was needed for repairs, they may come looking for their money back. If the claim was for 100 windows to be replaced and only 50 were replaced, the insurer may claim fraud on the part of the association for overreporting the damage. That might be all the more reason to put that excess insurance reimbursement aside, at least for a year or so, before moving it or using it for something else. All the best!
*** Please review the comment below from Bob Caspar who is a licensed public adjuster. He has a completely different take on the funds disbursed by the insurance company. He is an expert in this field and I highly suggest you read what he has to say.