Condo Loss Assessments Decision Upheld

BUILDING COVERAGE: $25,000

PERS. PROPERTY COVERAGE: $17,000

DATE OF LOSS: September 2022

DATE OF DENIAL: March 2023

APPEAL SUBMISSION DATE: March 2023

APPEAL ELIGIBILITY DATE: April 2023

PROPERTY DESCRIPTION: Single-family unit in a two-story condominium building. 

POLICYHOLDER’S APPEAL: The policyholder appeals the insurer’s denial and seeks payment for condominium loss assessments. [1] 

Result: Concur with Denial 

BASIS FOR DECISION UNDER THE STANDARD FLOOD INSURANCE POLICY (SFIP): [2] 

• The SFIP will pay up to the Coverage A limit of liability, the policyholder’s share of loss assessments charged against them by the condominium association in accordance with the condominium association’s articles of association, declarations, and the deed. The assessment must be made because of direct physical loss by or from flood during the policy term, to the unit or common elements of the National Flood Insurance Program (NFIP) insured condominium building in which the unit is located. (See SFIP (III)(C)(3)(a)). 
• The SFIP will not pay any loss assessment that results from a deductible under the insurance purchased by the condominium association insuring common elements. (See SFIP (III)(C)(3)(b)(2)). 
• The SFIP covers a condominium association’s loss assessments to an insured property for direct physical damage by flood. This does not include an assessment from the condominium association for property not covered by the SFIP, such as the cleanup of debris, sand, landscape lighting, repairs to parking lots, decks, sidewalks, and pools. [3]
• FEMA reviewed the policyholder’s assessment letter submitted on appeal. The assessment letter states it is for uninsured losses for property damages from Hurricane Ian. However, the letter does not provide any details as to what the uninsured losses are. 
• In case of a loss or request for payment, the SFIP requires the policyholder to provide a signed and sworn-to proof of loss with the documentation that supports the loss and dollar amount requested. (See SFIP (VII)(G)(3)-(5)). If the policyholder can obtain a more detailed breakdown of the loss assessment(s), the policyholder should submit it directly to the insurer for review. 
• For these reasons, the insurer properly denied coverage for the condominium loss assessment, as the policyholder has not proven the assessment is for damages due to direct physical loss by or from flood.