Community insurance is probably one of the most used in our day to day life, together with home insurance. These policies are responsible for resolving conflicts between neighbors that usually arise in the event of water damage (dampness, leaks, filtrations…), in which it is not known who is responsible. But, to what extent does it cover the assumptions? What is and what is not covered by the community insurance? Let’s take a look at the keys.
The loss ratio in community insurance for water damages
According to data from different companies,
When damage occurs in a common area of the community of owners, in 60% of the cases we are facing issues related to water.
In home insurance we would speak of a 30% of claims derived from these issues.
We will now explain how to act in the event of humidity or leaks, and through which guarantees the loss will be covered.
The origin of these losses
When dampness or leaks appear in a neighbor’s house or in common areas, it should be reported as soon as possible to locate the source of the leak.
The most important thing is this: find out whose pipe or deck is causing the damage. This will be the key to start solving the incident.
We look at the 3 types of claims that can happen to us, and how to act in the event of each of them → who responds, who covers it?
Private pipelines
If we are talking about a private pipe (of an apartment): it will always be the owner of the flat who will have to repair the leak, his home insurance. Then, depending on the damage, it will be repaired in one way or another:
- If it is in common areas: the damage can be repaired by the same home insurance, by the Civil Liability coverage; or the insurance of the community can repair the damage in this one, and between the companies they will be understood so that the “guilty” one is the one that finances the caused expenses.
- If it is in private areas: if the damages arise in the same floor where the leak occurs, by the coverage of water damages, the damages will be repaired or compensated. On the other hand, if it affects another neighbor, the incident is solved in the same way as with the community, the affected person will be able to repair with his home insurance and to repeat against the company of the causer, or that it is this one the one that takes charge of everything.
Community pipelines
If we talk about the problem being a community downspout or pipe, everything would be similar to what we have explained before, except that the one who must repair the origin and assume the cost of the associated expenses is the insurance of the community.
In short, the most important thing to know is that we must locate whose pipe is causing the damage. The person responsible for it will be the one who will assume the costs of repairing all the damages derived from the leak.
Downspouts
Does insurance cover downspouts? It must be taken into account that the downspouts of the building are a common element and that it is the community of owners who must be responsible for both their maintenance and the damages they cause.
Atmospheric phenomena
The last option is that the leakage is due to meteorological issues. In that case it would be necessary to see where the water is passing through. If it is through a terrace, it is normally the community insurance who should take care of it.
It will be necessary to see if the minimum limits are exceeded to cover possible damages to the terrace; except for gross negligence, damages caused to the penthouse, for example, would be covered by the Civil Liability guarantee.
The danger of sublimits in water damage coverages
Having explained all the possible scenarios, we have to be aware of the existence of a lot of small print in insurance… In this case, the risk is in the sub-limits for water damage or Water Damage Liability.
It is possible that we have subscribed 600,000 € of civil liability, but the small print of the policy speaks of a sub-limit in water damage of 150,000 €. It is important to check this in order to always contract with a company that:
- Or do not sublimate this water damage.
- Or sublimate it, but not too little.
We must be aware that we cannot know the value of the contents of each house. It is possible that all the furniture is from Ikea as well as having valuable furniture and Persian carpets. Therefore, our advice will always be that the coverage for water damage should be at least 300.000 €. We discourage sub-limits below this amount.
Just the other day we saw an Allianz policy, in this case, 46,500 € of sub-limit for water damage, which is totally insufficient.
