Apartment - insurance query

[errigal]

Quick query - If you own an apartment and there is a plumbing problem which causes damage to the apartment below you, but the excess on the management company block policy for flood damage is greater than the cost of the damage, where does the liability for this lie?

 

[ontour]

There is no easy answer, it depends on how the management company deal with these situations. They may take the decision that it was no fault of the the apartment below you and they should not suffer any loss and this would be paid by the management company. They may also decide that it isn't fair but that everyone who claims covers the excess because the owners collectively decided to go for the policy with that excess to control management fees.

If the management company get hugely involved they may look to the cause of the problem. For example if the cause was your washing machine then it is really your home insurance that should be eventually claimed against and not the block policy.

Claims against block policies vary wildly in what is allowed from a very purist view of only covering claims where the issue originates from the common areas to approaches where a heating leak within an apartment is covered by block insurance.

 

[errigal]

Thanks ontour

The cause in this case was a pump in my hotpress that broke unexpectedly and caused a leak.

 

[MichaelBurke]

Don't necessarily agree with this. If it's less than the excess then it's possibly legally up to each other to repair your own water damage, you can not be held liable as you are not negligable, unless you knew about the leak and did nothing?

Never really heard of anyone discussing insurance from a purists view point before, simply, if it's structural damage then it should fall under the block policy, forget any arguements about common areas etc.

And it would be a brave management company I personally think that would step in to a dispute between neighbouring apartments in a potential conflict like this, but this point I'm not sure about.

Maybe talk to the broker?

Hope I've read your query right, best of luck.

 

[Hans]

Don't necessarily agree with this. If it's less than the excess then it's possibly legally up to each other to repair your own water damage, you can not be held liable as you are not negligable, unless you knew about the leak and did nothing?
QUOTE]
ln theory maybe this is so but I know of two cases where apartments had leaks and it seeped into another apartment and the the owner of the apartment that had the leak had to pay the costs of other apartment. The owner of second apartment got legal advice and was told this was the situation.

 

[errigal]

It's interesting to see the responses and the different viewpoints. Sounds like it may be a bit of a grey area. In this case there was no negligence, and my plumber confirmed that even a review of the plumbing before it happened would not have identified a problem - once the pump went the water was turned off quickly and a bigger problem was averted (e.g. if the apartment had been vacant at the time)

It was also interesting to learn that the excess on the block policy for flood damage was a whopping 1500e... i.e. of little value to any owners unless there is a very serious flood.

The joys of apartment ownership!!

 

[ontour]

It was also interesting to learn that the excess on the block policy for flood damage was a whopping 1500e... i.e. of little value to any owners unless there is a very serious flood.

To be even more precise, it is of little value to the owner unless there is a serious flood that was caused by a pipe or equipment in the common areas.

Different assessors treat claims differently, there is not a consistent adherence to the terms of the policy. There are very few insurance companies that offer block insurance as many have lost a lot of money on this segment. The remaining insurance companies raise the premium based on claims history. IMHO if they were far more careful in the assessment of claims, premiums would be lower and their profit would be higher.

It may be financially more advantageous for you to claim against your household policy if it has a lower excess.

 

[MichaelBurke]

Don't necessarily agree with this. If it's less than the excess then it's possibly legally up to each other to repair your own water damage, you can not be held liable as you are not negligable, unless you knew about the leak and did nothing?
QUOTE]
ln theory maybe this is so but I know of two cases where apartments had leaks and it seeped into another apartment and the the owner of the apartment that had the leak had to pay the costs of other apartment. The owner of second apartment got legal advice and was told this was the situation.

Would be very interested in hearing further on these two cases as I would hav thought this goes against the norm i.e. you are not liable because you are not negligible. Could it be the case that in both these instances you mention, they were aware of a problem and did nothing to fix it? Or is the law different for apartment block owners?

 

[MichaelBurke]

To be even more precise, it is of little value to the owner unless there is a serious flood that was caused by a pipe or equipment in the common areas.

I'm not sure where you are getting your information from but this idea of it being in the common area is not accurate. I think you need to check your facts.