State-by-State Condominium Subrogation Laws: Florida

Making the proper insurance claim to recover damages to your condominium unit following a loss can be a daunting task. The first step to recovery is determining the origin and extent of the damage. Knowing the source of the damage and the extent of the damage will determine coverage and the insurance policies at issue. The next step is to review the applicable insurance policies, association bylaws, and your state’s condominium association statute. These instruments outline required coverages and allocate responsibilities between unit owners and the association. If the damages to an individual unit exceed policy limits then unit owners may find additional coverage after review of the master policy and association bylaws. The largest obstacle to successful recovery often deals with subrogation. A waiver of subrogation provision prevents the insurance company from pursuing legal action against the real party responsible for the damage.

Consider this hypothetical: Unit A is damaged from a leaking pipe from Unit B above. Unit A files a property insurance claim with Unit A’s insurance company. Unit A’s insurance company issues payment for the damages to Unit A. Can Unit A’s insurance company recover from the liability carrier for Unit B?

Consider a second hypothetical: Unit A is damaged from a common water pipe that leaked from the floor above. Unit A files a property insurance claim with Unit A’s insurance company. Unit A’s insurance company issues payment for the damages to Unit A. Can Unit A’s insurance company recover from the liability carrier for the condominium association?

The not so surprising answer to both hypotheticals is: It depends.

Florida Statute Section 718.111(11), governs property insurance for condominium associations. In Florida, every property insurance policy intended to protect the condominium must provide primary coverage for all portions of the condominium property as originally installed or any alterations of like kind and quality. The condominium master policy or association bylaws govern subrogation of property insurance claims. The association must repair any portion of the condominium property insured by the association and damaged by an insurable event. Subjections (f) and (j) are of particular interest:

(f) Every property insurance policy issued or renewed on or after January 1, 2009, for the purpose of protecting the condominium must provide primary coverage for:

1. All portions of the condominium property as originally installed or replaced of like kind and quality, in accordance with the original plans and specifications.

2. All alterations or additions made to the condominium property or association property pursuant to §718.113(2).

3. The coverage must exclude all personal property within the unit or limited common elements, and floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing which are located within the boundaries of the unit and serve only such unit. Such property and any insurance thereupon is the responsibility of the unit owner.

. . . .

(j) Any portion of the condominium property that must be insured by the association against the property loss pursuant to paragraph (f) which is damaged by an insurable event shall be reconstructed, repaired, or replaced as necessary by the association as a common expense. In the absence of an insurable event, the association or the unit owners shall be responsible for the reconstruction, repair, or replacement as determined by the maintenance provisions of the declaration or bylaws. All property insurance deductibles and other damages in excess of property insurance coverage under the property insurance policies maintained by the association are a common expense of the condominium, except that:

. . . .

2. The provisions of subparagraph 1, regarding the financial responsibility of a unit owner for the costs of repairing or replacing other portions of the condominium property also apply to the costs of repair or replacement of personal property of other unit owners or the association, as well as other property, whether real or personal, which the unit owners are required to insure.1

Florida condominium unit owners should review their individual unit owner policy, the master policy, the association bylaws, and Florida’s condominium association statute. Unit owners with a working understanding of these instruments will have the knowledge necessary to maximize recovery efforts following a loss.

1 Fla.Stat. §718.111(11)(f) and (j).

Puerto Rico: Liability of Unit Owners When Damages Extend to Common Areas of Condominium vs Subrogation Clauses

When damages occur in condominiums a frequent dispute is how to determine if damages will be covered under the unit owner’s insurance policy or under the Board’s insurance policy for damages in common areas of the condominium. For example, in National Insurance Company v. Seguros Triple S,1 the Puerto Rico Appellate Court discussed this issue when water that escaped from a damaged bathroom of one of the unit apartments caused damage to the electric panel of the elevators of the condominium.

The contract or insurance policy in this case also included a clause “Waiver of Rights of Recovery” that stated the right to waive to recover payment through subrogation. Insurers have the legal right to place subrogation agreements in their policies so long as they do not contravene applicable statutes.2 The Plaintiff in this case alleged he was still entitled to payment through subrogation.

Puerto Rico’s Insurance Code states that insurance contracts or policies should be interpreted globally with all its terms and conditions, as expressed on the policy and with its extensions, modifications by addendum, endorsements or applications attached that may be part of the policy.3 In case any doubts arise on interpreting the policy, this shall be resolved in a manner that provides protection to the insured. If no ambiguity exists in the contract than it shall be interpreted in conformity to the will of the parties when they agreed to the contract.4 The Supreme Court of Puerto Rico has held that it is the responsibility of the courts to determine the meaning of the words used in the policy in controversy, and the meaning should be one understandable to a person of normal intelligence that purchases an insurance policy. If a policy has clauses that are ambiguous they shall be interpreted in favor of the insured.5

Unit owners are responsible for the maintenance and repairs reserved for their exclusive use and occupancy. If a unit owner does not comply, and as a consequence damages are extended to common areas of the condominium, the unit owner may be liable for the repair or replacement. In Seguros Triple S, the insured alleged he was not responsible for the damages of the electric panel because the clause read:


WHO IS AN INSURED (Section ii) is amended to include as an insured each individual unit owner of the insured condominium, but only with respect to liability arising out of the ownership, maintenance or repair of that portion the premises which is not reserved for that unit owner's use or occupancy.

The condominium’s insurance policy included each unit owner as an insured under this clause, therefore, subrogation could no longer apply. National (the insurer) paid the Board $25,077 for the damages caused to the elevator’s electric panel. Under the clause, the unit owner’s insurance company was protected against actions of subrogation, therefore National could not recover the $25,077 paid to the Board for the damages caused by the water that escaped from the unit owner’s apartment. If subrogation had not been waived, National would have been able to recover from the unit owner’s insurance the amount paid to the Board. It is important to read and understand insurance policies to be able to make global interpretations of its meaning, coverage, and remedies available.

1 National Ins. Co. v. Seguros Triple S, Inc., 2005 WL 3351236 (2005).
2 Id. at 6.
3 26 L.P.R.A. 1125
4 Quiñones v. Manzano, 141 D.P.R. 155 (1996).
5 Pagán Caraballo v. Silva Ortíz, 122 D.P.R. 105, 111 (1988).