South Florida Condos – Is Condo Property Insurance a Real Concern for Owners, Sellers and Buyers?: Condo Water Damage Losses.

Posted By on May 14, 2013

Florida condominiums are used in several ways, as year-round homes, as vacation homes, and as investment properties. Many Florida condo owners permanently live in other parts of the country as well as around the world.

fort lauderdale florida condo skyline view

In fact, our local area is well-known with foreign buyers: the National Association of Realtors’ Profile of International Home Buyers has confirmed that last year, over 31% of all international real estate sales in Florida happened here, in the Miami area and its surrounding communities.  Over half of these foreign buyers in our area (coming from Canada, Venezuela, Britian, and more) are buying South Florida condominiums.

Condos are home to lots of folks and they are hot properties today.  According to the Miami Association of Realtors, the median sales price for a Miami-Dade condo was up 24.6% from last year (comparing first quarters) and already in May 2013, the sales prices for these condo properties has rise 4.5% over the first quarter of 2013.

Which brings us to the issue of upkeep and maintenance of these properties, particularly water damage.  Whether an owner, a tenant, or a property manager is responsible for monitoring the condition of a Florida condo, one of the biggest concerns from a real estate ownership perspective is avoiding water damage and the expense of property repair due to water damage losses.  This is true not only for condos that are being considered for sale, rent or purchase, but for Florida condos that are permanent and long term homes for their owners.

Types of Water Damage Common in South Florida Condos

Condominiums are known to have particular kinds of water damage issues as a general rule, many of which can impact not just the single unit but neighboring condominiums and the common areas as well.  These include:

  • washing machines that leak onto floors that do not have drains in the floor to protect against excess water coming from the washer;
  • burst water pipes (those who don’t live in South Florida in the winter may not realize that we can reach freezing temperatures here that can impact plumbing);
  • leaky toilets (like a busted fill valve);
  • water heaters that leak (again, this is a real concern when floors do not have drains);
  • dishwashers that leak (hoses fail, for example);
  • refrigerators leaking (usually these aren’t discovered quickly since the kitchen design may hide the sides and back of the fridge); and
  • bathtub and showers (old caulk that lets water through, shower pans that fail).

Fighting Insurance Companies Who Fail to Pay Water Damage Claims or Not Paying Enough on a Condo Water Damage Claim

Property insurance policies exist to help condo owners in situations where water damage has harmed their property.  Most people assume that they pay their insurance premiums and if they need to file a claim on their property insurance policy, things should be simple — as simple as it is for the insurance company to take that premium payment every month.

Unfortunately, this is not the case in many instances of South Florida condo owners filing claims for damage, particularly water damage, to their real estate.  It’s true that you can usually call in your claim, that’s easy enough.  However, the folk on the other end of the line aren’t your pals here:  they are representatives of a big company that answers to shareholders and is very interested in its bottom line.

Claims mean money paid out that lessens profit to the insurance company.  Insurance companies work not to help the individual policyholder but to keep the company profitable.  That’s the reality of things, which means that condo owners need to be well prepared to deal with the event of a insurance claim needing to be filed.

Condo owners need to do things like:

  • make sure that the policy information that has been reported to the carrier is accurate (if it’s not all accurate, then it may form the basis of a denial);
  • make sure that they have kept up with their property so the carrier cannot blame them for the loss;
  • be aware of Florida laws, including the availability of public adjusters, who are third party professionals that can come in to evaluate the situation as an independent third eye (instead of relying on the company’s employee to be the adjuster on the claim); and
  • be aware of the claims process — how long they have to file a claim, and when claims need to be filed as soon as possible after the damage has occurred.

If insurance claims aren’t properly respected, either because they pay too little or because they are denied outright, then filing a lawsuit against the insurance company may be the best alternative for the condo owner.  Litigation may be necessary in these South Florida situations, especially in instances where weather has resulted in a lot of claims being filed in a short time period.

Condo owners need to be aware of their rights and responsibilities regarding property damage and property insurance claims.  And those considering buying a South Florida condo, or those Miami area condo owners who live in other states or foreign countries, need to know their rights and prepare in advance to avoid a condo insurance claim fight.

Special Note For Our Frequent Readers:  Realty Trac’s latest Foreclosure Market Report has been released for May 2013, and according to their experts, there’s good news and bad news. Good news? Florida new (starting) foreclosures fell 27% from March 2013 to April 2013.

Not so good:  April 2013 and March 2013 both saw Florida with the 2nd highest foreclosure rate in the United States.  Also, foreclosure auctions in Florida (NFS) were up 55% from April 2012 and that means April 2013 is the 4th month in a row with an annual increase in foreclosure auctions scheduled to happen in Florida.

There’s more:  check out the report summary at RealtyTrac.

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Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific or personal situation, please call or email Larry because he can’t answer specific fact questions in general comments.

“I’m happy to take your call.”

Related:
Florida Condominium Law and the Broken Water Heater

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