Syndicate does not file a claim

A loss causes damage to a condo unit and to the condo building. However, the syndicate decides not to file a claim with its insurer. It must, however, assume responsibility for having the damage repaired. How does this work? Here are explanations.

For the syndicate

The syndicate must repair the damage caused to condo building property. To cover the cost of the repairs, it can:

• Withdraw the money from its self-insurance fund;
• Apportion the amount of the damage among all the co-owners based on their share.

And if a person is responsible?

• The syndicate can claim the amount of the damage from the person responsible. This could be a co-owner or a third party.
  • If the person responsible is a co-owner, it can only claim from him the amount not payable under the syndicate’s policy.
  • If the person responsible is a third party, it can then claim from it the total amount of the damage.

For the co-owner

If improvements to the co-owner’s unit were damaged, the co-owner’s insurer will cover the claim for that portion.

The co-owner may be required to pay his share of the amount of the damage claimed by the syndicate, regardless whether or not the co-owner’s unit was damaged. Co-owner insurance policies include coverage for the apportionment:

• However, to be compensated for the apportionment amount claimed by the syndicate, the co-owner’s insurance must include coverage for the loss that caused the damage.
• The policies generally cover between 90% and 100% of the amount of the apportionment that corresponds to the absence of or insufficient insurance, up to the limit of the insurance amount under the Extension of Coverage – Loss Assessment.
• The co-owner must pay his deductible.

Note: It is very important for co-owners to have coverage for all perils to which they could be exposed through apportionment. For example, even if they live on an upper floor, they could still be responsible for an apportionment for sewer backup!

What if a co-owner is responsible?

The responsible co-owner has civil liability coverage. His insurer will defend him and if he is considered to be responsible, it will indemnify the parties that suffered the damage as per the provisions of his condo insurance.

In this case, the syndicate can only claim from him the portion of the damage for which it would not have been indemnified.