Claims Handling Procedure
Condominiums, Cooperative Apartments and Homeowners Associations require specific claims handling procedures to insure efficient and timely settlement of claims.
PURPOSE – To help associations and property managers adopt efficient claims handling procedures.
For claims that cause damage to the interior of the unit:
Interior water damage and/or fire claims should be reported immediately to both the unit owner’s and the association’s master insurance carriers. The Board of Directors/Property Manager should contact a water and fire restoration contractor such as:
Water must be extracted, basements pumped out, and carpeting and floors dried, ideally within 48 hours to prevent mold growth.
**IMPORTANT: CLEAN UP BEYOND IMMEDIATE WATER EXTRACTION MUST BE APPROVED BY THE ADJUSTER REPRESENTING THE ASSOCIATION CARRIER. FAILURE TO SECURE APPROVAL FOR THE SCOPE OF WORK PERMITTED MAY RESULT IN YOUR ASSOCIATION BEING RESPONSIBLE FOR CLEANUP, REPLACEMENT OR CONSTRUCTION THAT IS BEYOND WHAT THE CARRIER DETERMINES IS REQUIRED.**
For claims that cause damage to both the interior and exterior of the unit:
Contact one of the following restoration companies:
161 West High Street
Somerville, NJ 08876
Emergency Hotline: 908.231.1234
For Mitigation/Repairs & Mold Remediation
Belfor Property Restoration
75 Virginia Road
North White Plains, New York 10603
Emergency Hotline: 1.800.856.3333
These companies will prepare written estimates to establish the value of the claim.
If the claim exceeds the Master Policy Deductible:
- Report the claim to the company that writes the Master Association Policy. The master policy adjuster will settle the claim using the contractor chosen by the board.
- Have the unit owner report the claim to their Homeowners carrier (HO-6) regardless of the amount as long as it is above their deductible.
In all claims the contractor is chosen and employed by the association, not the unit owner. The claims adjuster that represents the master policy will come to an agreed price with the contractor. We recommend the same contractor be used by the unit owner for damage to the interior of their unit. The contractor will also be responsible to come to an agreed price with the unit owner’s insurance carrier for the interior damage.
Once an agreed price is approved between the insurance carriers and the contractor, the board will then authorize the work to commence.
The board will inspect and approve the completed work prior to authorizing full payment.
If this procedure is followed claims will be settled in a timely and efficient manner.
NOTE: The Board of Directors should consider hiring an architect or engineer for claims that are in excess of $100,000 to establish specifications and supervise the work.
THE FOLLOWING SHOULD BE AVOIDED!
- Unit Owner employs the contractor
- The board hands over a check to the unit owner to make the repair
The Master Association Policy is written in the name of the association. The responsibility for any repair rests with the Board of Directors. Boards that deviate from this procedure may find themselves responsible to re-do work that is not completed or not of like, kind and quality of the original installation at their expense.