Great Letter That Made Insurance Company Payout Special Assessment Claim

Once and a while, you really just have to blog a post that says “go over to this site and read it.” So that’s what I have here.

The Consumerist (a great site) reprints a reader’s letter to their insurance company, in full, that was successful in getting the coverage he bought fulfilled. His coverage included payout for special assessments – which the condominium applied to owners in order to fix the glass railings around his condo.

The tone and approach are perfect for anyone else that is suffering issues with their insurance not fulfilling their product payouts.

Maryland Condominiums Have Right To Force Homeowners to Carry Insurance

I am humbled that there is a US state that has given the power to condominium boards to make carrying a homeowner insurance policy mandatory. For a country that often talks about the absolute right of the individual to make their own decisions (any anything, forbid, otherwise is some strange form of socialism, communism, or other ism), a collective has been given the power to require an owner to purchase specific insurance.

With condominiums, may people think that the insurance policy purchased by the condominium covers their units, when in fact this is normally not the case (there are exceptions).  Normally the insurance policy held by the condominium only covers damages and repairs to the common elements – the building envelope and grounds. It does not cover inside the owner’s unit.

For example, if you owned a unit in a condo that burnt down, and the condo is repaired, the corporation policy would rebuild the structure, but not the interior of your unit – the “betterments and improvements.” What’s a betterment or improvement – anything inside your unit. That would include the toilet (yup – the piping would come in, but the actual porcelain toilet is a betterment). It likely wouldn’t include your cabinets, your flooring, your paint, your sinks, and all sorts of stuff. You would have a shell, to fill as you would.

Additional insurance, bought properly, would cover those betterments and improvements (seriously, we don’t see the toilet as an improvement – we think it’s part of the unit, but it is). And because of the danger of fire or water or other loss, I always encourage people to buy the additional insurance.

It’s nice then, having been in the industry long enough to see several major losses, that Maryland will allow the boards to make this additional insurance required to be purchased by their owners. I’m not sure how they will enforce it (it seems a little toothless – what are you going to do, evict the owner?) – but it is good intention.

Some may wonder how few people actually pass on buying insurance – I have a great example. In Calgary, March of 2010, a massive condominium fire in the Millrise left hundreds homeless. Less than half, half, of the owners had additional insurance. That meant more than 100 people would have been left with just a shell of a unit when they were rebuilt, and would have had to pay the additional living expenses of shelter during the months and months to rebuild. Fortunately, the board had made a decision to carry the additional insurance for everyone – which allowed all the units to be rebuilt completely, and the homeless have their expenses covered during the rebuild.

Maryland’s insurance requirement is slightly different than what I described, as it’s a requirement to carry insurance against a deductible (of the common property insurance) for damages originating from their unit. But in general it is the same idea – forcing insurance and reducing the risk of catastrophic loss.

Adding Flames to Condominiums Banning Smoking Anywhere

There is a small (small) percentage of condominiums that are moving towards completely smoke free for their owner units. Not just content to ban smoking in the common property, they have enacted by-laws that prevent smoking anywhere in the complex.

There are a variety of reasons for this – buildings that are old or improperly sealed between units will leak second-hand smoke between units (I once lived in a rental condo where my unit acted as a chimney for the unit directly below). Wood structure complexes have started doing it for fire and insurance reasons. Some just do it to promote a healthy community.

I’m not all that excited about banning smoking in titled spaces (units). I think there should be opportunity for owners to have some control over their private spaces (for the record I’m a non-smoker). It would be too easy for a condo to move from banning smoking to banning ethnic foods in my mind. There is a level where protection in many issues become ethnic division – indeed, if everybody was exactly like you we would never have strife!

Anyways, there’s been another fire caused by cigarettes left improperly disposed of. In this case most of the fire damage was limited to the originating unit, but the unit below (that’s always the case) suffered significant water damage (and some minimal fire damage).

That will add heat to the debate for condominiums looking to ban smoking in owner residence as well.

Discarded cigarettes cause Millcreek condo fire – Salt Lake Tribune
Cigarettes spark Millcreek condo fire, officials say -Desert News