Water Damage Claim in CA

[Ladeejay79]

We live in a 32 unit PUD ( planned unit development) all units stand on their own and have shared walls. We are also members of the HOA.

My unit suffered water damage about a month ago due to a pin hole leak. The water from the leak damaged a significant portion of the floors in my living room (engineered wood that has been there since I purchased the unit.) And a few walls.
I submitted a claim to my HO-6 and per their interpretation of the CC&R - the HOA master policy provides primary cover that covers the units. The CC&R also has a provision that states that the HOA has the right to adjust their own claims. As such, my insurance asked me to submit a claim with the master policy. The deductible for the master policy is $5k. If my claim is accepted my assessment coverage would kick in to pay for the deductible. I have had a contractor come out and provide and estimate for 17k. The contractor says that the flooring we have is older and can't be matched and since the floor is open and continuous with no breaks they would
have change the floor in most of the house.

This week I spoke with the HOA's insurance. He asked me questions and surveyed the damage via video. He said he wouldn't be sending anyone out. He then proceeded to deny my claim saying that the damage is less than the 5K deductible.

I really wish I could use my coverage but the CC&R clearly state that HOA is primary.

I'm at my wits end. I thought about going back to my insurance but I don't think they will just accept the claim. I also don't fully understand what the section in the CC&R about the HOA being able to adjust their own claims means?

Any help? Thoughts?

 

[adjusterjack]

I spent a lot of years adjusting HO-6 water damage claims and your situation is very confusing.

Let's start with this contradiction:

all units stand on their own and have shared walls.

When I read that I think of town houses or row houses where an owner would insure his dwelling structure on an HO-3 (dwelling and personal property) and the shared walls would be covered 50/50 by each owners policy.

That you have an HO-6 leads me to believe that your unit does not stand on its own and that the HOA policy covers the dwelling structures in their entirety and your HO-6 covers your personal property and improvements that are not defined as "unit." That would include the flooring that you purchased after buying the unit and possibly drywall and paint depending on how "unit" is defined in the CC&Rs.

I question whether the HOA policy should be primary at all for just damage to your improvements or "unit" elements.

Please take note that you can upload a file. I'm going to need to read the CC&Rs in their entirety before going further with this, no matter how many pages it is. See if you can get a digital copy that you can upload here.

 

[Ladeejay79]

I'm sorry. That was a grammar mistake. I mean to say that we're not like condos in one building. Most units have 2 shared walls unless they are at the end of the row.

When I purchased the unit it was my understanding was that I was responsible for the interior and the only thing the HOA has responsibility for is the roof and landscaping. Needless to say, finding out that the HOA is considered primary is very surprising. Here are my CC&Rs. They are too big so I have to upload in 3 parts. I really appreciate any help you can provide.

 

[Ladeejay79]

They are too big so I have to upload in 3 parts.

 

[Ladeejay79]

Part 3

 

[adjusterjack]

After reading the CC&Rs and finding photos of the townhomes online it's clear that the property is set up more like condos where the association owns and insures all the buildings and you own a marketable title to the space you occupy.

When I purchased the unit it was my understanding was that I was responsible for the interior and the only thing the HOA has responsibility for is the roof and landscaping.

You were mistaken, possibly because you didn't read the CC&Rs when or before you bought your home.

Needless to say, finding out that the HOA is considered primary is very surprising.

Stands to reason that the HOA insurance would be primary because it is insuring everything.

I also don't fully understand what the section in the CC&R about the HOA being able to adjust their own claims means?

You may be thinking that the HOA has somebody assess your claim and decides what to pay. Not really.



What that says is that it's up to the HOA to deal with the adjusters at its insurance company. It's still up to the insurance company to assess the repair cost.

On that note, the insurance adjuster's position is that all of the flooring does not need to be replaced. It's an age old argument that I've had many times with my policyholders. Contractors want a big payday and will insist on the whole house and insurance adjusters want to replace just what is damaged.

Here's the thing. The flooring may be continuous in that it's the same flooring throughout but not visibly continuous throughout the house. Bedroom and bathroom doorways create a visual barrier so you might only be entitled to the cost of replacing the living room and contiguous hallways. And, of course, if you have more than one story, you certainly aren't going to get both if only one level was damaged.

One thing that might help you is this:



It appears that the HOA would not be in compliance with that if it didn't have a contractor out to inspect and provide an estimate.

 

[Ladeejay79]

Thank you for your response. I have emailed the adjuster and resubmitted my invoices to him. The water mitigation and leak detector invoices alone total $2700 so at the very least I would imagine the repairs total more than $2300. I have requested that they send someone one out to actually see the damage. However, I am feeling that he can simply just not respond to me as I am not in insured. Any ideas on how I get them to reassess the damage?

Am I I just out of luck at this point? I seems like I pay for my HO-6 and the HOA insurance through my assessments and although I have a valid coverable claim none of the carriers want to accept the claim. I'm losing hope.

 

[adjusterjack]

Try a letter to the board president referring to 5.8.1 and demand that he arrange for a contractor of his choice to assess the damage to your property.

If that doesn't do it you might have to get a lawyer involved.

 

[Ladeejay79]

What kind of lawyer? Insurance? Or one knowledgable about HOAs?

 

[Ladeejay79]

Try a letter to the board president referring to 5.8.1 and demand that he arrange for a contractor of his choice to assess the damage to your property.

If that doesn't do it you might have to get a lawyer involved.

What kind of lawyer would I need? The latest update is that the adjuster says that he did account for water mitigation in his estimate. He claims that is should have cost $1,345.67 but my invoice shows that it cost me $2532.00. How can that be?

The adjuster has agreed to come to my property to view the damage and I intend to have my contractor there, but does it matter if in the end it would be an HOA approved contractor doing the work?