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What factors are important when your association is considering a property claim?

1)  The Georgia Condominium Act - The insurance section 44-3-107

Georgia Condominium Act (Insurance Required Section) – This tells you:

a)  What coverage the association is required to carry: Fire and Extended Coverage which includes coverage for the perils of windstorm, hail, explosion, riot, civil commotion, aircraft, vehicles, smoke, vandalism, malicious mischief, theft, and breakage of glass. (Coverage for water damage is not required).

b)  The maximum amount of the association’s deductible the association is allowed to assess each unit owner (Because coverage for water damage is not required the amount of deductible the association can pass on to each unit owner is also not limited by the Georgia Condominium Act).

2)  Your association's documents - The insurance section may also limit the amount of the association’s deductible that you can pass on to each unit owner in the form of a “Loss Assessment”.

3)  Your association’s property insurance policy - This tells you:

a)  The type of coverage you have.

b)  The limit of coverage you have available.

c)  The deductible that will be apply. This can be and usually is different depending on the cause of loss:
Wind/Hail commonly have a 1 or 2 percent of each buildings value deductible.

SAMPLE Claims Spreadsheet - Wind or Hail

Water damage commonly has a per unit deductible.

SAMPLE Claims Spreadsheet - Water Damage 1 Unit

SAMPLE Claims Spreadsheet - Water Damage 3 Units

Per Unit Water Damage Deductible

All other perils commonly have a per occurrence deductible.

SAMPLE Claims Spreadsheet - Fire Damage & All Other Perils

4)  How many units have sustained damage - This tells you how many unit owners can be assessed for all or part of the association’s deductible.

5)  What is the estimated total cost of the claim – This helps you decide if the claim is large enough to submit to your insurance company.

6)  How much “Loss Assessment” coverage do the unit owners involved have - This tells you how much of your deductible you are likely to retrieve from “Loss Assessments” sent to the unit owners involved.

Coverage D – Loss Assessment

It is vitally important to send the “Association & Unit Owners Policies” letter we provide you to every unit owner and to allow us to conduct a “Unit Owner Seminar” available to all unit owners.

Association & Unit Owners Policies (SAMPLE)

7)  Do any of the unit owners have improvements or betterments and improvements or betterments coverage - This tells you if your insurance company will need to work with the insurance companies of your unit owners. This will happen behind the scenes and usually neither you nor your unit owners will be aware that it is occurring. However, it can sometimes slow down the claims process.

What information is required when filing a property claim?

1) What day and time did the claim occur?

2) Where is the damage? Be sure to include the association name and the complete unit address.

3) The property manager’s name and contact information.

4) The unit owner’s name and contact information.

5) What damage is there?

6) What caused the claim?

7) Have any steps been taken to mitigate further damage?

8) The names and contact information for all remediation contractors that have been contacted.

What are the steps for the unit owner and association in a property claim?

1)  Make sure there will be no ongoing or additional damage

For example: If there is a water leak make sure the water source has been turned off and water removal is scheduled as soon as possible.

2)  Document any damage with photos.

3)  Contact your property manager or board immediately.

4)  Review both your association’s coverage and your unit owner coverage.

5)  Contact your unit owner insurance company.

6)  Schedule the insurance adjusters for both your association’s insurance company and your unit owner’s insurance company.

7)  Your property manager or a board member may be required to sign a Sworn Statement in Proof of Loss.

Sworn Statement in Proof of Loss

8)  Review the preliminary adjustments from both insurance companies and make any corrections or updates.

Association Adjuster’s Letter

Unit Owners Adjuster’s Letter

Association Adjustment

9)  Schedule your repairs.

10)  Work with your contractors to make sure that repairs are being handled in both a timely and satisfactory manner.

11)  Submit any changes/additions to your claims as repairs proceed.

If more damage is found, you will need to inform your insurance company before repairs are made. Not doing so may affect coverage or payment for these damages. Your insurance company may need to inspect the property again or require more information before additional payment is made.

12)  Submit proof of the completion of all work.

In the form of; Photos, Contractors Final Bills, Certificates of Occupancy.

Contractor’s Invoice

Certificate of Occupancy

13)  Association provides the unit owners with a “Loss Assessment Invoice” to cover each unit owners portion of the association’s deductible.

14)  Each unit owners submits their “Loss Assessment Invoice” to their unit owners insurance company to collect their portion of the association deductible under their Loss Assessment coverage.

Coverage D – Loss Assessment

15)  All unit owners forward their Loss Assessment payments to the association to cover the association’s deductible.

16)  Receive your final claim payment (Recoverable Depreciation). Recoverable Depreciation – In some estimates, depreciation maybe applied, based on the age and conditions of the items requiring repair or replacement. If the depreciation is listed as “Recoverable Depreciation” you may be able to collect the depreciation after the completion of the repairs and the expense has been incurred. You will need to forward the final bill/invoice/proof of payment from the repairer. A re-inspection may be required of completed repairs.

Fire Claim (example of Recoverable Depreciation)

What are the steps for the insurance company in a property claim?

1)  Initial contact and review of your claim.

  • After reporting your claim, a claims professional will contact you usually within approximately one business day.
  • Your claims professional will most likely schedule an on-site inspection of the damages and take a reasonable amount of photos of the damage.
  • The claims professional will verify the details of the loss and the policy information to confirm the cause of loss and point of origin.
  • The claims professional will obtain fire and/or police department reports.
  • Fire Report

  • The claims professional will explain your coverages that apply. They will discuss:
    • The deductibles, potential coverage exceptions and coverage limits with you.
    • Options for getting an estimate of the cost to repair or replace your covered property.

2)  Getting an estimate of the damages.

Association Adjuster’s Letter

Unit Owners Adjuster’s Letter

Association Adjustment

Typically to determine the scope of the loss with an estimate of damages, one of the following will occur:

  • Independent adjuster inspection – Your insurance company, can arrange to have an independent adjusting firm assess your damages by sending an expert to your property or collecting information over the phone, email, or other channels. The firm will send an estimate of damages to your insurance company’s claims professional to review.
  • Desk top adjustment (small losses) – For losses with minor or limited damage, your claims professional can often get enough information from you over the phone or from photos you send to estimate the damages.
  • Property only – When property is damaged or stolen, your claims professional will gather information from you to best determine how to evaluate the damage. Please collect as much detail as possible regarding your property including model numbers, manufacturer names, purchase prices, and purchase dates. Please do not discard any property until we have been able to inspect it.

3)  Settling your property damage claim.

  • After your claims professional obtains and reviews the final estimate of the damages, he or she will prepare a summary of the amount you will receive and contact you.
  • Please refer to your policy for specific limitations and exclusions.
  • Your claims professional will also investigate if subrogation is necessary.

Subrogation — This is when your association has damage caused by another party. Like a contractor that is negligent and damages your property while working for your association. To expedite your claim your insurance company pays for your repairs. This automatically triggers the “subrogation provision” in your policy. Which states that your association then “subrogates” or assigns your rights, by terms of the policy or by law, to collect from the person, firm or corporation liable for the loss or damage to your property for which your insurance company has made payment.

If subrogation is necessary, they will put the insurance companies they intend to subrogate against on notice.

Sworn Statement in Proof of Loss (describing subrogation)

4)  Payment.

  • You will receive a check payable to the named insured on the policy (The Association).

5)  Managing repairs.

  • Keep in close contact with the contractor you hire to complete your repairs. The repairs must progress reasonably. If you have any questions during this time, please contact your claims professional.

What you should know about how your insurance company views your property claim!

1)  Your insurance company wants you to receive quality work to restore the damages to your property.

2)  Your insurance company will provide you with a detailed estimate of the scope of the damage and costs of repairs. Should the contractor you select have question concerning our estimate, they should contact your claim representative directly.

3)  Depending upon the complexity of your repair, your insurance companies estimate may or may not include and allowance for general contractor’s overhead and profit. If you have questions regarding general contractor’s overhead and profit and whether general contractor services are appropriate for your loss, please contact your claim representative before proceeding with repairs.

4)  There may be building codes, ordinances, laws, or regulations that affect the repairs of your property. These items may or may not be covered by your policy. Please contact your claim representative if you have any question regarding coverage which may be available under your policy.

5)  If you select a contractor whose estimate is the same as or lower than your insurance companies estimate, based on the same scope of damages, your insurance company will pay based upon their estimate. If your contractor’s estimate is higher than your insurance companies, you should contact your claim representative prior to beginning repairs.

Association Adjuster’s Letter

Unit Owners Adjuster’s Letter

Association Adjustment

6)  Your insurance company cannot authorize any contractor to proceed with work on your property. Repairs should proceed only with your authorization.

7)  Your insurance company does not guarantee the quality of the workmanship of any contractor or guarantee that the work will be accomplished within any specific time frame.

8)  It is understood that the contractor is hired by you and that they work for you – not your insurance company.

Water Damage Claims Explained!

Water, Water Everywhere … And Who Do You Think Is Gonna Pay? – an article written by George E. Nowack, Jr. of Nowack Howard Community Association Attorneys https://nowackhoward.com/ 770 863-8900 [email protected]

What measures can our association take to help prevent water damage claims from frozen pipes?

Frozen pipes can split or burst resulting in damage to buildings and personal property. The damages can range from a few hundred dollars into the millions, depending on where in the building the damage occurs. A pipe burst on the top floor of a high rise can result in water running down the whole building.

Freezing of pipes usually occurs in unheated or poorly heated location within the building such as basements, crawl spaces, attics, garages, electrical and plumbing chases, spaces adjacent to elevator shafts, skylights, broken or defective windows, or other openings and against exterior walls that have little or no insulation.

One cause of pipe freezing is loss of interior building heat, either from running out of fuel for the heating system, loss of electric power or loss of gas, propane, oil, or other fuel may result in a disruption to heating systems. The most common cause of loss of interior heat is a unit owner failing to leave their heat set no lower than 60 degrees when they are gone for an extended time.

1)  Know the locations of shutoff valves so that you can stop the flow of water as soon as possible when a pipe bursts.

2)  Inspect unheated areas.

Basements, crawl spaces, attics, garages, and or against exterior walls. Locate all water supply lines and fire protective sprinkler systems. Make sure both, hot and cold, water pipes as well as fire protective systems pipes in these areas are properly insulated. For severe situations consider wrapping or lining pipes per the manufacturer’s instruction with thermostatically controlled heat tape, which will turn on at certain minimum temperatures to prevent pipes from freezing. Seal leaks and replace missing insulation. Consult your sprinkler maintenance contractor prior to wrapping sprinkler pipes.

3)  Maintain heat in the building.

Make sure all unit owners understand that they are required to leave their thermostats set not lower than 60 degrees. Check heating fuel levels when severe temperatures or weather conditions have been forecast for your area. Schedule a delivery if in doubt.

4)  Have your heating system inspected and/or serviced each year before winter.

Using a properly licensed and insured HVAC company will ensure that your system is prepared for the winter months ahead.

5)  Have your sprinkler system inspected and/or serviced each year before winter.

Using a properly licensed and insured sprinkler maintenance company will ensure that your system is properly insulated and prepared for the winter months ahead.

6)  Have your roof vents and drains inspected and/or serviced each year before winter.

Roof vents that do not close or seal properly can expose interior piping to frigid air. Roof drains that do not drain properly and subsequently freeze can cause water back up and pressurize piping to the point of leaking or bursting. Using a properly licensed and insured roofing company to make sure that your roof vents and drains are operating correctly will ensure that you are prepared for the winter months ahead.

7)  Consider installing a backup generator.

Which will permit the heating system to remain operational during extended power outages.

8)  If you are unable to do the preceding preventive measures and severe cold is forecast, turn on both hot and cold faucets near outside walls to allow a small trickle of water to run as this helps prevent freezing and pressure build up in the pipes.

9)  If frozen pipes are discovered, call a licensed plumber before you heat the area or attempt to thaw out the pipes as a majority of water damage occurs during the thaw.

What proactive measures can our association take related to hidden potential property issues?

Why is it important for your association to review your claims on an annual basis?

1)  Managing your claims is one of the best ways your association can control your insurance cost.

Be thoughtful when submitting claims – It isn’t always in your association’s best interest to submit every little claim. Insurance company underwriters consider two main factors related to claims:

a) Severity – If your association has a very large claim this will have an adverse effect on the future companies and rates that are available to your association. Unfortunately, this is not something your association can control.

Fire Claim (example of a sever claim)

b) Frequency – This is how many claims your association has. By not submitting every small claim your association can reduce your claim “frequency” and this will in the long run help mitigate unwanted rate increases. I.E. By raising your association’s water damage deductible, you can reduce your claim frequency for this type of claim.

2)  Making sure the reserves your insurance company has set for your open claims accurately reflects the liability can help with your renewal rates and shopping your insurance with other carriers.

Each insurance company will use a different actuarial method to calculate reserves based on the type of claim. Most often, claims adjusters reconcile their open reserves in January after their “Year End” results are posted. This is in the adjuster’s best interest not yours. It is your right to questions when the amount doesn’t make sense based on the claim.

Reserves can sometimes stay open for claims that are years old and your association was not at fault. I.E. Your insurance company was contacted by an attorney and your adjusted set a reserve for legal costs. Your insurance has not heard from the attorney in over a year nor has the claims adjuster reviewed the claim since the time it was opened. It is your right to request that an aged and inactive claim be closed, and the reserve be removed.

3)  Making sure closed claims are really closed, including reserves set for the claim, can also help with your renewal rates and shopping your insurance with other carriers.

A claim’s status can be changed to closed, but that doesn’t automatically clear any open reserve that was put in place for the claim. It is your right to request the reserve for a closed claim be removed.

General Liability

Swimming Pool Safety Program – Great American

Directors & Officers Liability

Ian H. Graham/CNA Directors & Officers Claims Guide

Steps To Avoid Directors & Officers Claims - Ian H. Graham

Ten Most Common Directors & Officers Claims - Ian H. Graham


Fidelity Claims – Smooth Criminals - Ian H. Graham


For Association Questions or a Quote Please Contact:

Allen Lewis
Ph: (404) 245-7208

[email protected]


Trip Lewis
Ph: (770) 401-3510

[email protected]