Property & Casualty Insurance/Water Heater burst

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Question
Hello,
Back in August I cam home to my condo (in Florida) in the afternoon one day and found my floor to be flooded. I immediately began drying it. A few minutes later the downstairs tenant and the manager of the building knocked on my door to tell me that the water was leaking and damaging her apartment.  I called the plumber and he came over and shut it off. I thought that I was not liable for the damages to the condo downstairs because there is no way I could have known that the heater would bust. I do not have insurance. I now received a letter from an independent adjusting firm for my downstairs neighbors insurance company saying that they intend to subrogate against me for damages. $12,964! Am I liable? What should I do?
Thanks for your help,
Aaron

Answer
Aaron,

I am sorry to hear about your problem.

Everything actually comes back to what the condo by-laws say as far as to what will happen. Condos are unique types of property because technically, you only own the finished surfaces and the air inside your own unit ... everything else is jointly owned with ALL of the owners of the other condos. There should be language within the by-laws that address this type of situation because it is so common. IF those by-laws say that each owner is liable for water escaping from their unit, then you are probably on the hook ... if not, then the other owner's policy can't really subrogate against you as there was no negligence involved in the loss. You were as much of a victim as the other owner was to an accidental discharge of water from a plumbing, heating or AC system.

You may have a problem if the by-laws stated that you were required to carry insurance with liability coverage and you didn't have that. This may be a hard way to learn that insurance should always be carried, even if there is little value in the property.

Hope this helps.

Kevin Hromas
JD, EGA, RPA, PLCS, HCRI-R/C, CPIU, WIND® Umpire
Kevin Hromas & Associates
... A Division of US Insurance Information LLC
www.KevinHromas.com

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Kevin Hromas - JD, EGA, RPA, PLCS, WIND Umpire

Expertise

Insurance related issues for both commercial and residential property coverage. I am a licensed, executive general adjuster currently holding a Texas resident P&C license (614250), New Mexico non-resident all lines license (248774), Oklahoma non-resident P/F/M license (A299561), Florida non-resident P&C license (E117051) and a National Flood Insurance Program certification (06040100). My areas of expertise involve property and casualty issues in both residential and commercial policies with regards to claims practices and issues. I deal extensively with Lloyd's of London commercial policies and various domestic carriers for residential policies.

Experience

I am a licensed, executive general adjuster currently holding a Texas resident P&C license (614250), New Mexico non-resident all lines license (248774), Oklahoma non-resident P/F/M license (A299561), Florida non-resident P&C license (E117051) and a National Flood Insurance Program certification (06040100). My areas of expertise involve property and casualty issues in both residential and commercial policies with regards to claims practices and issues. I deal extensively with Lloyd's of London commercial policies and various domestic carriers for residential policies. After a 20 year career as a General Contractor, I was employed by Allstate Insurance as an adjuster in Texas, holding various postitions within the property claims department. After leaving Allstate, I specialized in handling losses associated with major catastrophes through-out the country. (Hurricanes Isabel, Charlie, Wilma, Katrina, Ike, etc., hail storms, floods.) I am currently retained as an expert by multiple insurance defense firms in Texas for issues in litigation in regards to claims issues and practices. I am also a certified Umpire for formal appraisals.

Organizations
Member - Society of Registered Professional Adjusters Fellow - Council on Litigation Management Member - Property and Casualty Association Member - Texas Independent Insurances Adjusters Association Member - National Association of Independent Insurance Adjusters Member - Houston Claims Association Member – Windstorm Insurance Network Member – Association of Property & Casualty Claims Professionals

Publications
Claims Magazine (www.ClaimsMag.com and then search 'Kevin Hromas' for a full listing of articles and quotes.) www.ClaimsPages.com, www.ProAdjuster.org, www.KevinHromas.com

Education/Credentials
JD - University of Houston Law Center - 1992 BA - Southwest Texas State University - 1980 AA - South Plains College - 1977 PLCS - Personal Lines Coverage Specialist

Past/Present Clients
Certain Underwriters at Lloyd's of London, Fulbright & Jaworski (Law Firm) Bracket & Ellis (Law Firm) Thamm & O'Briant (Law Firm) Sheehy, Ware & Pappas (Law Firm) Walker, Wilcox and Matousek (Law Firm) Financial Guarantee Underwriters

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