A condo damaged by water, a wait for insurance of six months
Six months later, however, she and her husband are still living under an unsightly tarp covering the large chunk of the living room ceiling that had to be demolished. There is water damage throughout the condo.
What is causing the delay? Well, there are actually three insurance companies involved, and possibly a fourth that has yet to be drawn into what has become, for Enriquez, a disheartening feud.
An agent for Enriquez, responding to the constant delays, told him in May that “these types of claims are always tricky” because many insurers are involved.
Let’s take advantage of this unfortunate experience to better understand how it all works:
Q. Why didn’t Enriquez’s home insurer just pay for the repairs?
A. Travelers, Enriquez’s insurer, paid several thousand dollars, but not the full cost of repairs to its ceiling, walls and floor, which could reach $ 20,000. All standard insurance policies begin with a statements page, which summarizes half a dozen types of coverage and the dollar amounts of coverage. “Cover A” in the standard form covers your “home” and may be the most important. The travelers paid Enriquez $ 2,000 for coverage A, even though his policy gave him coverage of about $ 100,000.
Q. Why did Travelers limit their payment to $ 2,000?
A. When you own a condo, you are in fact covered by two policies: yours and that of the building, generally called the “main” policy. You and the other owners of your building pay the primary policy through the condominium association fee. The main policy is considered the main insurer of the building.
Q. If the main policy covers the building, why did the travelers pay $ 2,000?
A. Insurers of single units in condominiums will generally pay up to the deductible amount of the master policy. The two policies are complementary and do not overlap. In Enriquez’s case, the primary policy deductible was $ 2,500. Travelers, as a secondary insurer, therefore paid this amount, less its own deductible of $ 500.
If you own a condo, you need to know the deductible amount of your building’s main policy and whether your personal policy will cover up to that amount. Any discrepancy between the two policies leaves you exposed. At $ 2,500, the deductible in Enriquez’s case is low. The trend in recent years has been for condominium associations to increase primary policy deductibles to $ 10,000 or more to save on premiums.
Q. Did Enriquez’s Travelers Police pay anything else?
A. Yes. “Cover D” on the standard The declarations page is for “loss of use,” which allowed Enriquez to recoup the cost of a hotel and some food when she and her partner had to move temporarily. If furniture or other personal property had been damaged, Enriquez could have made a claim with the travelers under “Cover C, Personal Property”.
Q. What happened when Enriquez submitted his claim to the building’s primary insurer?
A. Let’s go back for a moment and consider that most types of insurance have two distinct components. The former covers you for damage to your property (Cover A, C, D, as mentioned above, and B for “other structures”, if applicable). It is a contract between you and your insurer that states that you will be paid for the damage, regardless of who is at fault or if no one is at fault, with a few exceptions.
The other part concerns civil liability (cover E for “personal civil liability” and F for “medical payments”). It covers you when you are at fault. Let’s say you neglect to keep your condo in good condition and a guest falls and gets injured. You are personally liable to your guest for damages, including medical bills. But your home insurer covers you for these damages. (Auto insurance is similar in that it has separate elements of ownership and liability.)
Q. Why is liability coverage relevant to Enriquez?
A. Because the building’s primary insurer, Penn-America, treated its property damage claim as a liability claim, as if Enriquez was making a claim against the condominium association for misconduct.
And it took Penn-America nearly six months to finally issue a letter denying its request. “We have completed our investigation … and find that our insured (the condominium association) has no liability,” the letter said.
Six months is far too long to wait for insurance to repair your home. I have reviewed dozens of emails between Enriquez and various insurers and agents. For months, Penn-America struggled to reach the upstairs neighbor, its insurer and contractor, repeatedly responding to Enriquez’s request for updates saying he was still investigating.
When the denial finally arrived, it prompted Enriquez to return to Travelers to see if he had any advice. It was then that Travelers, after reading the letter from Penn-America, told Enriquez that it “appears to be a disclaimer” but “should have been” a claim for damages.
Q. Is it relevant to Enriquez what actually caused the damage to his condo?
A. No, not really. But for Penn-America, it’s relevant. He may have a good claim against the upstairs neighbor or his flooring contractor (or his contractor’s insurer), depending on what happened. (A water pipe above Enriquez’s ceiling had small drilled holes.)
Q. Where are things now?
A. Penn-America reopened Enriquez’s request.
Since last week, the tarp was still hanging in his living room.