Condominium Associations

Associations are sometimes not listed in the declaration pages of insurance policies. I have seen property management firms, program administrators and the wrong Association listed in the declaration pages of insurance policies. While infrequent, it happens enough that those responsible for obtaining the insurance for an Association should make certain the insurers correctly list the Association as an insured at the point of sale.
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A recent case decision, Mt. Hawley Insurance Company v. Aquasol Condominium Association, Inc.,1 should have all association board members, condominium property managers, and condominium general counsel asking their insurance agents what will happen if their own association members sue the association. A recent case says there is no coverage for the cost to defend the suit and no coverage for the property damages to which the association may be liable.
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Unit owners of associations are clearly intended beneficiaries of the property insurance policy that the associations purchase. Indeed, in many situations, the association policy pays for the individual owner’s unit damage as well as the common elements. So, when a unit owner is damaged by a delaying, denying or underpaying property insurer, can the unit owner sue for the owner’s personal loss?
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Many states require condominium associations to maintain property insurance for the common areas of the building but leave it up to the unit owners whether they want to insure their individual units or personal belongings. Oklahoma, however, is different and does not require the association to obtain insurance for the property.
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