Q: The apartment above ours had a flood caused by a faulty valve that damaged my apartment. I have a homeowner’s insurance policy, but my neighbor is uninsured. The condo says it has no responsibility. Should I sue my neighbor for damage to my apartment not covered by insurance? — Elliot
A: Fortunately, homeowner’s insurance will cover most of your damages.
Many condo dwellers do not purchase individual insurance policies, wrongly thinking that the building’s insurance will fulfill their needs. Your association’s policy will cover the building and common areas but often fails to protect individual unit owners’ belongings, flooring, appliances, cabinets, and drywall.
Most individual policies also cover liability to your neighbors for negligence or if the unexpected happens, like a burst water heater or a guest getting injured.
As you can see, your neighbor’s lack of policy puts you both in a difficult situation.
You will need to work through your insurance company. Report the damage and follow their instructions to maximize your claim.
Under the contract with your insurance company, you may have signed over the right to sue your neighbor. This legal concept is called “subrogation.” After paying you, the insurer will likely sue your neighbor to get the money back. Read your policy carefully and ask your claims representative about it.
There is a chance your insurer might not intend to sue your neighbor for various reasons; if they do not, you should be able to retain the right to collect from your neighbor.
The critical takeaway is to check with your insurer before doing anything that might jeopardize your coverage.
Your association may also be on the hook for the damage. Just because the manager says something does not make it automatically correct.
Review your condominium documents to see what your association is responsible for. Ask them to report the damage to their insurance company if there is some chance your association has responsibility.
