When it comes to damage, few things are more expensive to replace than windows and sliding glass door systems. Almost every condominium unit has at least one sliding glass door system, and most have more than one. Widespread damage from earthquakes or hurricanes can prove extremely costly for an association and lead to substantial assessments if not properly insured.
In the aftermath of Hurricane Wilma, one large condominium insurer attempted to avoid paying for damages to sliding glass doors and windows by arguing that they were the property of the individual unit owner and not of the association. Based on the condominium documents that left maintenance of these systems to the individual unit owners, the carrier argued that they were not property that was required to be insured by the association and did not fall under the coverage of the master policy.
Unfortunately, many associations unknowingly accepted this position from their carriers, their carriers’ adjusters, and even a large insurance broker who helped many associations procure insurance in the first place. (While it may seem strange that a broker was giving coverage opinions, the fact that the broker owned the company handling the claims for the carrier may shed some light on why this was happening).
On the flip side, some associations challenged their insurers’ positions and filed suit to obtain reimbursement for damaged windows and doors. Two main decisions relating to this position were ultimately issued, both finding that windows and sliding glass door systems were covered under the associations’ property insurance. Both decisions were based on a thorough analysis of the relevant condominium documents as well as the relevant portions of Florida Statutes Chapter 718. Mayfair House Ass’n, Inc. v. QBE Insurance Corp., No. 07–80628, 2008 WL 4097663 (S.D. Fla. Aug. 29, 2008) and Royal Bahamian Ass’n, Inc. v. QBE Ins. Corp., 750 F.Supp.2d 1346 (S.D. Fla. 2010).
While the associations finally received payment for these damages, many more were left out in the cold. Some associations spent hundreds of thousands or millions of dollars to replace damaged windows and sliding glass doors, simply believing that their insurance policy did not cover it.
When dealing with an insurance company, an adjuster, or a broker, it is important to follow up and confirm the information they provide. If a large portion of your claim is denied or withheld, you should contact competent legal counsel to ensure that you and your association are protected.