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Dear James,
I live in NJ and have a condo on the upper floor. On 7/30/2013 night  my neighbor from downstairs stopped by and informed me that she had a leakage from her ceiling in the utility room. We inspected  my utility room together and did not find anything wrong. No leakage, no water on the floor.  I suggested her to ask my neighbor who we share a utility room wall with. Maybe leak was coming from his place. She said that there was a leak in his apartment a couple of weeks ago. The problem with this neighbor is that he is absent for a long time and it's not easy to find him.  

The very next day I got an email from my neighbor from downstairs. She told me she wanted her plumbers to inspect my unit. I agreed and stayed home on Thursday 8/01, 2013. Her contractors came to my unit and told me that it was my water heater that was causing a leakage downstairs. They also told me I had to replace it. I was surprised and asked them how it was possible that I did not have any sign of leakage at my place, but she had a leakage in her ceiling from my heater. They said that's why they were professionals and could determine things like that. They said they would charge $1425 for the whole project. I know it is way too much for this job, but I agreed because I wanted to stop leakage downstairs ASAP. They turned off water in my heater and replaced it the same day. The contractor who did the job was not the same person who came in the morning. After he finished the job I asked him if everything was O.K. and if the leakage was stopped. He seemed surprised and said that my heater could not cause the leakage, that there is a drain that would prevent it.

I stopped by at my downstairs neighbor on 8/02 night to make pictures of the damage. There were signs of leakage on the walls and ceiling. But they did not look wet. I do not know how long it takes for a leakage like that to dry up. But when I had a leakage in my garage, it took months for it to get dried.

I opened a case with my insurance. But they say they will not pay for downstairs damages because I'm not liable for it. But my neighbor expects me to pay and refused to file a claim with her insurance.  

What should I do? Who is supposed to pay for her repairs? How is that possible I did not have any sign of a leakage, but she says it came from me. I made a mistake and did not take pictures of my utility room and her utility room before they replaced the heater.

Am I legally obligated to pay her if my insurance determines that I'm not liable for it?

Thank you,
Sofya

Answer
Hi Sofya,

Apologies for not getting back to you sooner.  Here's the way negligence/'being liable' works.  The English version: If your carelessness leads to someone else's injuries/damage, then you are responsible.  If their injuries were NOT due to your carelessness, then you are not responsible.    Here's the legal-ese version:  For you to be liable, you must be negligent.  For you to be negligent, you must NOT have acted as a prudent person would have acted. For instance, if you know your staircase is not safe, but you let people use it anyway and they are injured, you are negligent, hence liable for their injures.   If someone comes to visit you, and they are standing on your property and get struck by lightning, since you were not careless (or negligent#, you are not responsible for their injuries.

So..your insurance company says you are not negligent, therefore they are not covering you.  That also means since you are not negligent, you are not responsible for your neighbor's damages.  Your insurance company WILL respond if your neighbor sues you and within the lawsuit alleges that you were negligent in some way. #Failure to properly maintain??#

My advice at this time is to get the condo association involved and/or the management company.  Tell your neighbor that since you are not negligent #hence not liable), you are not paying for damages. If the condo association informs you that the by-laws make you liable for the damages, then report that to your insurance company.   That should trigger coverage.

As for whether or not you are negligent as of this moment, that is for an attorney to answer.  I am just letting you know how insurance policies respond, and how negligence works.

Hope all this information helps...

James Berliner

Property & Casualty Insurance

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James R. Berliner, CPCU

Expertise

My specialty is personal and busines insurance, relating to the property and casualty field. Homeowners, Auto, Business Auto, Workers Compensation, Business Interruption, Crime, Directors & Officers Liability, Employment Practices Liability, Professional Liability, General Liability, Umbrella Liability, etc.

Experience

I am the owner of my own agency (established 1970), have obtained my CPCU designation, and am licensed in many states.

Organizations
IIABA (Independent Insurance Agents and Brokers of America), CPCU Society, PIACT (Professional Insurance Agents of Connecticut - Board of Directors)

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