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Condominium property claims involve a layer of complexity that single family home claims generally do not, because two different insurance policies, and often two different sets of responsibilities, can apply to the same physical loss. Sorting out where the association’s responsibility ends and the unit owner’s begins is a document driven question that shapes how a claim is ultimately evaluated.
The starting point for this boundary is almost always the condominium declaration and the associated bylaws, sometimes supplemented by rules specific to the association. These governing documents define what constitutes a common element, meaning the parts of the building and property the association is generally responsible for insuring and maintaining, and what constitutes a unit, meaning the space and, depending on the declaration, certain finishes within it that fall to the unit owner. Declarations vary significantly from one association to another. Some define the unit boundary at the interior face of the drywall, others include certain fixtures or built in improvements as part of the unit, and still others use different boundary language entirely. There is no universal standard, which is why the specific declaration for a given property is the necessary reference point rather than a general assumption based on how another building nearby is structured.
Common elements typically include the building structure itself, exterior walls, roofs, and shared systems, while unit finishes typically include flooring, cabinetry, fixtures, and interior wall and ceiling finishes within an individual unit, though again, the specific line varies by declaration. A loss such as a plumbing failure within a shared wall, or roof damage that affects both common roofing structure and an individual unit’s ceiling finish below it, often touches both categories at once, which is part of why coordination between the association’s master policy and the unit owner’s individual policy is frequently necessary to address the full scope of physical damage.
It is worth being direct about where interpretation of these boundaries fits into the appraisal process. Determining exactly where the declaration draws the line, and how ambiguous language in a specific set of governing documents should be read, is fundamentally a legal and document interpretation question, one that often involves the association’s board, its attorney, and the unit owner’s own reading of both the declaration and their individual policy. The appraisal process itself is focused on valuing the physical loss, meaning determining the amount of damage and the reasonable cost to repair it, based on what the building and the documentation support. An appraiser or umpire does not resolve declaration interpretation disputes, but does need a clear understanding of which physical components fall within the scope of the specific appraisal being conducted, which in practice often requires the declaration, or the relevant portion of it, to be provided as part of the file.
Because condominium losses frequently involve coordination between two policies and, at times, two separate appraisal or claims processes running in parallel, clear communication among the association, the unit owner, and their respective carriers about which physical elements are being addressed in each track tends to produce a more efficient and accurate result for everyone involved.
This article is general education about how the appraisal process commonly works. It is not legal advice, and specific procedures can vary by state and policy.
Russ Lis is a working property insurance appraiser and umpire based in Minnesota, serving clients nationwide. Contact Appraisal Resolution.