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Insurance Claims for Florida Homeowners and Condominium Associations
There are thousands of homeowners associations (HOAs) and condominium associations all over Florida. The sizes and responsibilities of these groups can vary from community to community, but most of them maintain some sort of insurance policy to protect their assets.
Because of some of the extreme weather like hurricanes or flooding in certain parts of the state, insurance policies can be extremely important for HOAs and condo associations. These groups can pay significant premiums in order for the following forms of protection:
- Property Damage – This type of policy would serve to protect utilities, property, and common areas that are shared by the HOA or condo association community. In the event of a fire, flood, hurricane, or sinkhole collapse, a property damage policy would pay for the cost of repairs that can easily be millions of dollars.
- Criminal Damage – This policy could protect an HOA or condo association from graffiti, vandalism, or arson, but certain criminal policies can also serve to protect the association from fiduciary mismanagement by a board member or other officer. These policies are sometimes referred to as fidelity insurance.
- Liability Claims – A person who is injured by a slip and fall accident, malfunctioning equipment, or violent crime on that HOA or condo association's property may file a property liability lawsuit. This type of insurance policy can help cover the cost of any settlements in such cases.
While insurance for an HOA or condo association may be costly, it is generally seen as being a worthwhile investment. However, many boards of such associations are shocked when insurance companies fail to provide adequate compensation after a claim is filed. Some of the common problems that HOAs and condo associations encounter when filing an insurance claim include:
- Delayed payment – Florida Statute § 627.70131 specifically states that an "insurer shall pay or deny such claim or a portion of the claim" within 90 days after receiving notice of an "initial, reopened, or supplemental property insurance claim from a policyholder," but does allow insurance companies some leeway if "the failure to pay is caused by factors beyond the control of the insurer."
- Denial of claim – There can be various reasons for a claim to be denied, including but not limited to a lack of evidence, certain accidents not being covered by certain policies, or policies being cancelled because premiums were not paid on time.
- Inadequate settlement amount – The insurance company may undervalue a claim and offer an amount that is significantly less than the actual cost of the damage.
- Negligent defense provided in liability claims – In certain general liability claims, an insurance company could leave a policyholder stuck with a settlement that exceeds policy limits.
Insurance companies investigate claims to limit their own payouts, finding reasons that claims fall into exclusions that are not covered under certain policies. An HOA or condominium association does not have to simply accept these types of outcomes. An experienced attorney can negotiate to seek a more favorable recovery or take the insurance company to court if it fails to provide a satisfactory amount.