Handling Emergency Situations and Insurance Claims
Although it may seem counter-intuitive in emergency situations, the first thing to do is obtain the necessary information, organize your thoughts, and create a to-do list. To assist you with this endeavor, below is a list of things to consider when you receive these types of calls.
1) Get the necessary information
Where did the damage originate (unit component or common area component)?
What caused the damage (i.e. failure to maintain, act of god, unforeseen circumstances)?
What was damaged (i.e. unit, personal possessions, or common area)?
What are the names and contact information for all owners involved in the situation?
Who is responsible for insuring and repairing the damaged components?
Please note, the insurance and repair obligations may be held by different entities/individuals.
If you have a maintenance and insurance chart, this would be a great time to use it!
2) Mitigate damages
Does water need to be shut off? If so, who is on the scene to do it?
Does a restoration company need to be called out?
If so, owner should be notified that this may end up being charged back to the owner.
It is also a good idea to send an email to the owner on the following business day confirming this representation.
3) Insurance claim submission
If damaged components are the responsibility of the association to insure, consider the following things when making a decision on whether a claim should be submitted:
Are damages likely to exceed the deductible amount? If so, a claim should be submitted to the association’s insurance carrier. If damages are less than the deductible amount, a claim need not be submitted to the carrier.
If a claim is minor, but over the deductible amount and the board does not want to submit a claim to the association’s carrier, the association can opt to pay owner the amount of damages over the deductible.
How are deductibles allocated?
Check the association’s governing documents for this information and/or your insurance deductible policy for this information. If you do not have such a policy, consider adopting one for these types of situations.
(2) If the owner will be required to pay the deductible amount, such owner should be notified of this fact in writing as early on as possible.
If the association ends up submitting a claim, it will be provided with a claim number and adjuster with whom the board/manager will work to determine the scope of damages, the insurance proceeds, and contractor(s) who will repair the unit.
4) The Aftermath
As the insurance claim process moves forward, you may need to consult with the association’s legal counsel to determine if the owner is responsible for any portion of the repairs. Factors that may impact an owner’s payment obligations include, but are not limited to, the following?
Owner responsible for the deductible
All or a portion of the claim is denied by the insurance carrier
Owner made upgrades to the unit that are not covered by insurance
Contractor’s price is higher than amount allowed by insurance
If the owner will be required to pay for any portion of the repairs, it is important to notify the owner of this fact in writing as soon as this determination has been made.
Association representative(s) should monitor the progress of repairs to ensure work is being performed as agreed and to the required standards.
If you follow this outline, your next emergency situation may not be as gut-wrenching as some of your previous scenarios, and you be able to get a good night’s rest after all.