Q: Forgive me, but I’m a bit confused by the advice an insurance company employee gave me about a basic concept of condominium unit coverage. This is something about which you have previously written in your column.
In discussing this matter with this representative of a large insurance company, I was told that, for example, if water from my apartment damaged the unit below, that person’s insurance company would legally have to pay the damage, not my insurance company.
I also was told that this ruling is found in the Illinois Condominium Property Act. Could you please cite the section of the statute?
A: If water from your apartment damaged the unit below, you are personally responsible for the damage. And insurance coverage for the damage is dependent upon the terms of your neighbor’s insurance policy.
Section 9.1(a) of the Illinois Condominium Property Act states a unit owner is responsible for damage to another unit or the common elements caused by the operation of the unit.
This provision means that a unit owner is responsible for damage to a neighbor caused by an appliance, plumbing apparatus or other cause, regardless of whether or not the owner was negligent.
Thus, the unit owner, and not his or her insurance carrier, is liable for a neighbor’s damage.
In most cases, with the proper coverage, the insurance company for the damaged party should cover a claim by the owner who sustained the loss. That company, however, may have a right of subrogation or reimbursement against the responsible party. That would mean seeking money from you, or your insurer.
Regardless of the position of the carrier, in your example, the owner is liable to the neighbor below for the extent of the water damage, caused by the operation of equipment in the unit above.
The Illinois Condominium Property Act does not assign liability to the insurance carrier of an owner for damage within a unit. The major insurance provision in the law, contained in Section 12, states the insurance coverage requirements for an association.
The entire article can be found here.