Condominium Insurer’s Disclosure Requirements Limited to Condominium Only
What happens in a situation where you own a condo, have an insurance claim, and the insurance company sends out an inspector who discovers additional damage? Well, a lot hinges on where that damage is — it is in your condominium or not? And it also depends on whether the damage, if outside your condo, caused the damage inside your condo.
A recent case, Fichtel v. The Board of Directors of the River Shore of Naperville Condominium Association, No. 2 07 1237 (Ill. App. Ct. 2nd Dist., April 21, 2009), illustrates this point. In Fichtel, the plaintiff condominium owner had water damage in her unit and filed an insurance claim. State Farm, her insurance company, sent out an inspector to investigate the claim. During the course of the inspection, the inspector entered the attic space above the plaintiff’s unit to see if the water damage was coming from there. When he came out, he told the plaintiff that the water damage was not caused by a leaky roof. However, he did not tell the plaintiff that there was mold in the attic.
The attic was not part of the plaintiff’s condominium unit and was not insured by State Farm. It was a common area, and so the inspector notified the condominium board of the mold in the attic. He also allowed the plaintiff’s claim for water damage, which State Farm paid.
Later, the plaintiff sued State Farm along with the condominium association. The plaintiff alleged that State Farm had an obligation and an affirmative duty to disclose the mold to her. State Farm denied the plaintiff’s allegations, and the court concurred with State Farm. The court’s reasoning was that the mold was not in an area insured by State Farm, it did not cause the water damage in the plaintiff’s condominium, the plaintiff’s water damage claim was unrelated to mold, State Farm had no fiduciary duty to the plantiff (they were only her insurer), and State Farm was only doing what it was contractually obligated to do under its contract with the plaintiff — that is, investigating her claim for water damage.
Most insurance policies are very specific — they will only cover your condominium, not anything else. If you have any damage to your condominium and your insurance company’s inspector investigates areas outside of your condominium for the cause, he is not obligated to disclose anything he finds that is not relevant to your claim. He is an inspector for the insurance company, not an inspector for you. If you are concerned that areas outside of your own condominium unit may be suffering damage, it is best for you to hire your own inspector to investigate.