Loss of Use of Condo; Who Pays for the Living Expenses?

J.S. from New Haven County writes:

Dear Mister Condo,

If you lose use of your condo unit due to a pipe burst in the attic of the building that damages your unit and someone provides you with lodging, transportation, and food, shouldn’t they be reimbursed for their expenses?

Mister Condo replies:

J.S., if a unit owner has purchased a standard homeowner’s policy, (HO-6 here in Connecticut) there may be some coverage available to help with some of those expenses. It is typically found in the section of the policy called “Coverage D – Loss of Use” and its purpose is to cover costs associated with the loss of use of a condo, which is what you are describing here. Typical HO-6 policies offer coverage in the amount of 20% of the total amount covered in Coverage A also known as the “Dwelling Coverage”. For instance, if the policy provided $25,000 in Dwelling Coverage then Coverage D would typically provide $5,000 in Loss of Use coverage. Of course, like all insurances, there are limitations and specific events that need to occur for the coverage to take effect.

If the unit owner did not have an HO-6 policy in place at the time of the burst pipe, then there will likely be a lot of “out of pocket” expense. I would not expect that the insurance held by the condo association would be expected to pay for any of those things while the condo unit is being repaired.

I am a strong advocate for all condominium unit owners to maintain their own HO-6 policies. Many associations require that unit owners have it; some only suggest it. As your example illustrates; it is far better to have it and not need it than to need it and not have it. Thanks for the question. All the best!