Beware of Condo Insurance Charge Backs; Protect Yourself

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Nothing beats kicking up your heels onto your coffee table and having a cold drink after a long day in your own condo while you enjoy the scenic view. I mean, you’ve done your due diligence right? You had the place inspected professionally, had your condo documents reviewed by professionals, your lender had no issues with the building, and you and your condo association have insurance. Life is good.

Then there's a knock at your door. You open the door and that nice couple who always smile and make nice small talk with you in the elevator, are losing it at your door. For a brief moment you're at a loss, then you hear what they are saying: “water, water, water, water!” Then you notice that the carpet in the hall is soaked, and it clicks in -  your washing machine is running. As you open the door to the laundry room, water gushes out and you can see the hose has become disconnected from the tap and it is just free pouring water all over the place.

Thankfully you have insurance, and so does the condo association because, water has made its way from your washing machine to the mechanical rooms, laundry rooms in other units, elevator shafts and so on. Luckily everyone is extremely understanding, noting that it could happen to anyone. The repair work is done, insurance covers the bill, and it's all good.

Until you get the horrible notice tucked under your door from the condo association. Your unit damage was covered by your insurance, but the common areas and other damage were covered by the condo association's policy. You paid your deductible, and they paid the association's deductible. Except that the condo association's policy has a crazy deductible - 50,000.00 large ones - and their policy is to charge that back to the source of the problem (even if you are a really nice guy). Gulp. 

You see, insurance companies have been hit with tough times recently, and even with Lloyds of London announcing a $4 Billion (or was that pounds?) profit recently, deductibles everywhere are on the rise. If your policy covers the charge back on a deductible you are golden, if not, you just had some really crappy luck. So when you are getting your condo insurance, it is very wise indeed to make sure it covers charge back insurance on the deductible for the association's policy, in case for whatever reason, you are in need of it.

About 

Sheldon is very familiar with the ins and outs of real estate; he has been licensed to sell Real Estate in Alberta for over 20 years. Sheldon has served on the Real Estate Council of Alberta, the Real Estate Insurance Exchange and the REALTORS® Association of Edmonton. Find Sheldon on Twitter @edmontonsheldon.

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2 Responses to “Beware of Condo Insurance Charge Backs; Protect Yourself”

  1. KeithNo Gravatar 24. Jun, 2014 at 6:01 am #

    Great advice. Great post. This actually happened to some clients of mine a few years ago. They (we) too learned the hard way.

  2. mdmNo Gravatar 27. Jun, 2014 at 2:39 pm #

    Excellent advice ! Never thought of charge backs ! Glad to have escaped unscathed, when I owned a condo in the past !