In most cases an Association’s CC&Rs does not offer a clear cut answer (many actually remain silent on the issue) involving payment of the insurance deductible. This often causes confusion and inconsistencies, which leads to more problems for the Association.
As a general rule, Associations that pay the insurance deductible experience a higher frequency of claims because the individuals making the claims simply have everything to gain and nothing to lose. They are provided full coverage with absolutely no exposure.
At Steve Reich Insurance, we recommend you establish a fair policy and procedure that is easily understood:
Proposed Deducible Payment Procedure -- Any Condominium Association
Circumstance:
If the loss occurs as a result of negligence of the individual unit owner
Responsible Party: Individual Unit Owner
Circumstance:
If the loss occurs as a result of the failure of a portion of the unit that is within the unit owner’s care, custody and/or control (according to governing documents)
Responsible Party: Individual Unit Owner
Circumstance:
If the loss occurs as a result of negligence of the Association, or if the damage was caused due to lack of maintenance as called for in the CC&Rs.
Responsible Party: Condominium Association