Home Insurance in 07018>Question Details

Suburbangal, Home Buyer in 10001

Will my Geico insurance pay for a special assessment by my condo? We have to fix the bldg due to builder's negligence (we are suing).

Asked by Suburbangal, 10001 Wed Dec 8, 2010

The builder used shoddy material and labor and now my bldg is leaking water. The builder won't pay to fix it either so now we must sue. How much does condo insurance premium rise if I file a claim for $4,000 ? Should I just pay it myself (I've already paid my first $800 installment to the condo) or should I take a chance to file the claim?

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Answers

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If you have the traditional condo insurance, it doesn't cover the outside walls. It only covers drywall in because you do not own the structure, the HOA does. That being said, something like this gets claimed on the master condo policy, not your personal condo insurance. Some personal condo insurance policies have a provision where they will reimburse you if you are assessed for damages through your HOA, however I believe it's an optional coverage so you may or may not have it.

So to simplify it, all the outside repairs ( drywall out) should be covered by the master condo policy your HOA carries, all the inside repairs get covers by your condo insurance which might also have coverage for assessements. Call your agent to find out what coverages you have

Andrew and Elena Ollick
Amerivest Realty
239-206-4500
eo@oceanhomesrealty.com
Latest Post: Housing Has Finally Hit the Bottom
http://www.andrewollick.com/realestateblog
1 vote Thank Flag Link Wed Dec 8, 2010
Regretfully, Geico will not cover unless you have coverage for special assessments.

Now let's say you had a leak in your unit, then Geico would cover, but since it is a leak in the building that is being Pursued by an attorney, who is going after the builder and in the mean time the repairs are being paid for
By a special assessment, slim to no chance.

Also, hopefully the builder has enough insurance to cover the cost of all repairs as it is not uncommon
For builders to file for Chapter 11 or close down, the lawyers still have to be paid.

Good luck.
Perry
0 votes Thank Flag Link Sat Jan 1, 2011
Probably not. A special assessment is never something that the insurance company will cover.
0 votes Thank Flag Link Sat Jan 1, 2011
Your personal condo insurance (HO6) only covers the interior of your unit, therefore, your condo association insurance covers the rest. Although the builder is responsible, if the builder is no longer around, you and your association will be footing the bill thru that insurance or as a special assessment. I can tell you that it is somewhat difficult to sell when there is a lawsuit pending and taking care of the problem now will at least help in resale.
Good luck.
0 votes Thank Flag Link Sat Jan 1, 2011
There are really not enough details here to answer your question. How did the leak originate? How was it discovered? How extensive of a repair in terms of total dollars is necessary to fix the entire building? Was mold present? Do you have something in writing documenting the builder was asked to fix it and refused?

If the condo is new, and you are the original owner, the HOW insurance policy you received from the builder may cover it (during the first 10 years). If not, I would receive a written explanation from your HOA office stating why the master blanket insurance policy does not cover it. Was a claim submitted? An insurance company must supply a written explanation why a claim was denied. Ask for this documentation. Don't just assumre this was done.

If your condo is condominium ownership (HO6 policy) it is unlikely that it will cover damage that originated on the outside of the building, damage caused by the neglect of the builder, etc. It may cover part of the repair cost if your individual condo was damaged on the INSIDE, if they can document and verify the damage.

Karen Evertsen
Realtor-Associate
THE CONDO QUEEN
RE/MAX Greater Princeton
0 votes Thank Flag Link Fri Dec 31, 2010
Unfortunately our bldg already has a real estate lawyer and we were told our condo master policy won't cover. The bldg is not a new construction but rather the builder gutted out an old abandoned bldg and refurbished. In any case the master condo policy won't help. Should I try to pay this by calling my own policy then?
0 votes Thank Flag Link Wed Dec 8, 2010
Surburbangal, Andrew and Elena answered you perfectly correct, so it would be fruitless to file a claim through Geico. These repairs should be covered under the Condo's Master Policy which you should have a copy of.

In the State of New Jersey all new construction has to have a 10 year builders warranty per state guidelines, so I have a question for you. Is the condo association under the control of the builder or close associates?

It may be in your best interests to consult with a real estate attorney (NOT a General Practioner) to protect your interests.
I hope everything works out for the best, good luck.
0 votes Thank Flag Link Wed Dec 8, 2010
I would find a local attorney who specializes in representing homeowners associations - who is not the attorney representing your condo - and have them review my insurance policy and advise me, not just on the insurance aspects, but on the overall lawsuit.

This won't be fun. You have my sympathy.
0 votes Thank Flag Link Wed Dec 8, 2010
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