March 25, 2024 • 25 mins
Welcome to this episode of Community Matters podcast, where we discuss issues important to managing and governing condos, cooperatives and homeowner associations.
In this episode, Denise Adamic, CMCA, Community Association Liaison for Horn Williamson, delves into the challenging world of property losses and insurance claims, providing invaluable insights gained from her over two decades in the industry.
As a veteran community association manager who has dealt with three major insurance claims in recent years, Denise's story serves as both a warning and a guide for property owners and managers navigating the complexities of insurance coverage and recovery after a property loss.
From in-depth discussion about navigating insurance claims during a catastrophe to dealing with unexpected costs related to remediation and rebuilding after a devastating event, this episode provides firsthand knowledge and helps you learn the practical steps to prepare for potential disasters and understand why it's critical to have an insurance policy that adequately meets your needs.
Special thanks to our sponsor - Hoffman Law, LLC. Visit Hoffman Law online for more information.
Community Matters is available in the iTunes store, on Google Play and on Spotify. Subscribe there or download the podbean app and be the first to receive notifications when new episodes are posted.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Music.
(00:14):
The podcast that brings you conversations that are critical to managing and
governing condos, cooperatives, and homeowner associations.
I'm your host, Tony Campisi, Executive Director of the Keystone Chapter of Community
Associations Institute.
Tune in each episode for the insights and information that are key to inspiring
(00:37):
professionalism, effective leadership, and responsible citizenship.
Citizenship, ideals reflected in community associations that are preferred places to call home.
Today's episode focuses on property losses and insurance claims.
My guest today is Denise Adamic, CMCA AMS PCAM, Community Association Liaison
(01:00):
for the law firm Hown Williamson.
Denise spent many years as a community association manager and an apartment
manager. She also experienced three recent losses that resulted in major insurance
claims on properties that she personally owns.
Denise will share and talk about her unfortunate losses so we can all learn from her experience.
(01:24):
Before we get to today's topic, here's a brief word from our sponsor, Hoffman Law LLC.
I'm Ed Hoffman with Hoffman Law LLC. Hoffman Law LLC is a recognized leader
in community association law.
We're known for our responsiveness, legal acumen, leadership in the association
(01:45):
industry, and our unwavering focus and commitment to education.
You can learn more about us at our website, hoffmanhoalaw.com.
Hoffman Law LLC is proud to sponsor this episode of the Community Matters Podcast. podcast.
Denise, welcome to Community Matters Podcast, and please tell our listeners
(02:07):
a little bit about yourself.
Hi, Tony. Thank you so much for having me. My name is Denise Adamek.
I am the Community Association Liaison at Horn-Williamson. We're a law firm
that services community associations.
I work with Matt Collins, Esquire Extraordinaire, and I am a former Community association manager.
(02:28):
I worked as a manager for several years, as well as a manager for multifamily properties.
So I've been in the industry for about 22 years at this point.
Did you have, I'm sure you did, when you were a manager, I'm sure you had insurance
claims similar to the ones we're about to talk about that you've had personally.
(02:50):
Yes. As a manager, I saw, you know, many, many different types of insurance
claims, and they were kind of an eye-opener for me.
They made me realize what could happen.
And so I learned some lessons through there that kind of helped me in my own personal life.
(03:11):
Which is the whole point of this interview, I guess. Yes.
So you had three major insurance claims to properties that you personally own,
all within a three-year period.
That must have been, I guess, a nightmare scenario. Tell us about them.
Yes. I've had the pleasure of three major losses.
(03:31):
The first was in August of 2019. I live in a town home and my neighbor's house
had a catastrophic fire.
Their home was completely destroyed.
Well, the inside of it, there was a lot of structural damage,
but it didn't have to be demoed. But my home suffered a lot of smoke damage.
(03:54):
They had to take out some drywall to make sure there were no embers burning inside.
But because I was adjacent to the townhome that suffered the significant damage
and because we had shared walls...
I was displaced for three months while the contractors and the engineers and
(04:15):
the township and everything did what they had to do.
So that was my first brush with a major insurance claim.
My second claim was at a rental property that I own and the neighbor's water
heater leaked and caused a bunch of damage to my property.
(04:35):
There was a lot of drywall that needed to get it replaced. The entire floor
throughout the apartment had to be replaced.
It was about $20,000 worth of damage.
And so my tenant was inconvenienced and it was just a mess.
And then my third was a fire that occurred in October 2022.
(05:01):
So about a year and four months ago, I had a catastrophic fire at the rental property that I own.
It's an eight-unit building, and pretty much the entire building was destroyed
due to an electrical fire.
And so my tenant was displaced. The building had to be completely demoed,
(05:22):
and they are still building, rebuilding.
So it's been about 14 months, and it's still not rebuilt. So that was a lot of fun.
Thankfully, nobody was was hurt yes fortunately no one else heard in any of
the the situations the the water leak.
And the building loss same
(05:44):
unit right same tenant yes yes okay so
within within three months my tenant had you know a major water loss and then
she literally you know that was put back together and literally like three or
four weeks after that the fire happened so it was awful yeah that That can be traumatic for anybody,
(06:05):
one incident, let alone two.
Yeah. So you were a community manager prior to your work at Martin Williamson.
How did that experience help you prepare for, I guess, primarily,
and then navigate these three losses?
So I used to manage a community that was plagued with water leaks,
(06:28):
whether it was a water heater or a sprinkler going off or...
Facade leaks. There were constant problems. And I witnessed homeowners there being displaced.
A lot of these losses resulted in their units being condemned for many,
(06:49):
many months while they rebuilt.
And we had several residents and owners that were displaced for several months at a time.
And some of them ran out of insurance for their living expenses or,
you know, so that really was a learning experience for me.
(07:11):
And I called my insurance company after seeing all of this happen.
And I was like, look, I want to make sure that if I'm ever displaced,
I have enough coverage to last me as long as it's going to take to rebuild my
property. So I increased all my coverage on both my properties.
And ironically, maybe two or three months after that, I had my first fire.
(07:35):
And because of that, because of what I had seen happen to some of my residents,
I was very cautious about how I used what coverage I had available to me.
Because you only get a certain limit of living expenses.
So I knew that I had X amount of money to last me however long it was gonna take.
(08:00):
And I had no idea how long it was gonna take for me to move back into my condo
after seeing how long it was taking all of my losses at the communities that I managed.
So I was very conservative. A lot of people will, you know,
move into a hotel, for example, like a residence in or a long-term stay hotel
(08:23):
where it's pretty expensive.
And that eats away at your coverage very, very quickly.
And that's why some of our residents ended up running out of coverage on their living expenses.
So that was the biggest thing that I learned from being a manager was to be
very conservative and to make
sure that I I had enough coverage for the out-of-pocket living expenses.
(08:46):
So had you not increased your coverage before the first of these three incidents,
as a result of your experience as a manager, you increased your coverage.
You wouldn't have had enough insurance to cover these losses, is what you're saying.
Well, the first one, I probably would have been okay, because I was only out
of my house for about three months.
(09:07):
And like I said, I was conservative with how I used my coverage.
I stayed with my parents for a few weeks and then I moved into,
I got a short-term, a two-month short-term rental and rented like the bare minimum
for furniture that I needed to survive.
So I was able, I was fine with that loss.
(09:29):
I did not have enough coverage for my rental property, but we'll go more into
that later. So what would you tell homeowners then?
What should the homeowners consider when purchasing their own property coverage?
So you really need to look at your governing documents and make sure you understand
(09:49):
what is and what is not covered.
You know, every condominium and every HOA is completely different and you cannot
make assumptions based on the look of the property.
For example, I live in a townhouse, so I have a three-story townhome that is
(10:10):
adjacent to another property.
But it's considered a condominium. So the condo covers the roofing,
the siding, the actual structure.
I'm only responsible for what's inside the walls.
Now, other townhomes, you do have to pay for the roofing, the siding, the structure.
(10:32):
So it's very important that you understand what your documents are and what they say.
And and whether it's considered walls
in which would cover you know your your cabinetry your cart your flooring your
you know all the other finishes back to build your grade or if it's walls out
(10:57):
where it's basically just the drywall and then you have to you have to ensure everything,
inside the unit so that's a big thing the other big thing is you have to understand
what your master policy's deductible is.
In both my properties, I think the deductible is $10,000.
So if there's an insurance claim that's $5,000, my homeowner policy is going to cover 100% of that.
(11:27):
The master policy isn't going to kick in. If it's above $10,000,
say it's in the case of my my water heater loss, the damage was $19,000.
So my policy covered the first $10,000 and then the master policy covered the remaining balance.
Now, some associations have premium or deductibles that are $100,000.
(11:51):
So if you're gonna have to be responsible for that $100,000,
you better make sure you have enough coverage for $100,000 worth of damage.
So it's just really important that you understand all those little details.
So talk to your insurance broker or your carrier and go over all those details
and make sure they understand what's going on.
(12:14):
And hopefully, if you're working with a good broker or carrier,
they're going to know what kind of questions to ask and what to look for to
make sure you're properly insured.
I know I heard in your answer there that you are basically saying,
I want to read the documents.
And I'm saying that with a little sarcasm because we hear that often in this industry, right?
(12:35):
Oh, yeah. I mean, I would never buy in an HOA or condominium without reading
my governing documents first.
It boggles my mind that there's so many people out there that don't do that.
But of course, we're also in the industry. So, yes.
(13:19):
Underwear your electronics like all that
stuff adds up really really really quick and you know
you gotta and i mean my neighbors the
first buyer they lost everything everything and
they didn't have insurance they didn't have they were tenants but they did not
have tenant renters insurance so they lost everything they owned so you just
(13:42):
gotta make sure you really take into account everything And some insurance companies
also require like kind of documentation of what you have. I was very lucky.
My, my insurance company.
Really did not nickel and dime me. I said, Hey, I, I, a pair of shoes got ruined
and they would say, okay, here market value for a pair of shoes is whatever.
(14:04):
And they would just add it to the, you know, to the tab.
So, and then finally, you know, try in the,
in a situation of a, a town home or a condominium, a condominium,
especially you're kind of at the mercy of of the association and the township
(14:25):
as far as how long it's going to take to rebuild.
So, you know, the association is going to have to go out to bid for sometimes
just the demoing of the property.
You need to have permits and then the engineering plans have to get drawn and
then they have to submit the permits to the township.
And there's just a really long process. And they told me from the get go with
(14:49):
my second fire that it was going to be about 18 months to rebuild like that.
That was right off the bat.
And in April, it will be 18 months. And I don't know if it's going to be done.
So when you plan on having at least 18 months worth of coverage for your out
of pocket living expenses,
(15:09):
if in the event that you have to move into another apartment or something, so you don't run out.
So I'm sure you had some unexpected expenses that were covered by your insurance. Tell us about that.
Well, one of the funniest, it wasn't really funny, but it was kind of funny
because it all ended up okay.
But during the day after the fire, the remediation company was there and I'd never had a fire before.
(15:35):
You know, this was my first time and I was still kind of in a state of shock
and they're there kind of cleaning everything up and they're like,
okay, well, we recommend that you send send all of your textiles to professional
cleaner to get all the soot and smoky smell out the textiles because that's
all toxic and everything.
And they're like, we have somebody we can recommend. So they came over and we're
(15:59):
walking through the house and I'm pointing at, you know, all the curtains and
the rugs and the pillows and bedding and towels and everything.
And they're gathering it all up.
And long story short, it came, that bill came to $24,000.
(16:19):
And I was like, what? Because half the stuff wasn't even really valuable.
You know, I'm not, I'm a frugal person. I don't spend a lot of money on that kind of stuff.
So that represented about half of what my coverage was for my personal belongings.
So I think I had about $48,000 coverage for my personal belongings,
(16:43):
which included any furniture that needed to be replaced, any clothing that needed
to be replaced, anything anything like that.
So I was in a state of shock because I was like, well, I don't know what else
I'm going to need to replace. And that's half of my coverage right there.
So I did end up disputing it with the company.
And my insurance carrier was able to get them to knock off, guess how much?
(17:07):
$10,000, which is an indication of how much they mark up those kinds of prices. is.
But just be aware that there's going to be a lot of unexpected expenses.
For example, remediation might have to come out of your pocket.
If they have to trash out your unit after the fire to clear it out,
(17:32):
they're probably going to bill you back for that.
So stuff like that that you don't really think about is all going to be covered
by your policy. I'll see.
That price differential also is indicative of some unfortunate practices that
happen in disasters where there are some people out there who try to take advantage
of you because they know you're in a difficult situation and you might not be
(17:53):
prepared to ask the right questions about prices.
And so that's a really good piece of advice there.
Yeah. And when I called the cleaners to complain about how much they charged,
because I felt like I got swindled, to be honest, us because there were certain
things that I was pointing out to them saying, oh, I don't know if I even want
to clean that. I might just throw it away.
(18:14):
And they were like, no, just just add it in. Who cares? You know,
might as well get it all clean.
And so I called the people and I was like, I if I had known it was going to
be this much, I never would have sent all my stuff.
And she's like, well, what do you care? Your insurance company is paying for it.
And I said, yeah, yeah, but it's coming out of my limit, my insurance, my coverage limit.
(18:37):
It's not infinite, you know? Like, I'm going to run out eventually.
So definitely think of all those scenarios.
What expenses were not covered by your insurance? Were there any that were not covered?
Well, I wouldn't say it wasn't covered, but I had to sit with the water heater loss.
(18:57):
My neighbor's water heater failed.
And he admitted to me that it was very, very old and that it was rusty.
And so in my mind, it was his fault that he should be responsible for the damage
(19:17):
to my unit because he neglected to maintain his property.
I personally had just replaced my water heater like six months before proactively
because I had seen how much damage a leaky water heater could cause.
So in my mind, I was like, why should I have to pay for this?
But my governing documents at that condo do not allow for subrogation,
(19:38):
which means no matter who's at fault,
your insurance company can't go to that other person's insurance company and
have them cover the cost.
So that was really upsetting to me. And I mean, in the end, I think I only had my.
Deductible was pretty low on that loss, but it still was frustrating to me.
(20:02):
And it seemed unfair that I should have to pay that when it wasn't my fault.
The other thing, sadly, even though I I increased my coverage on my rental property a few years before.
It was not enough to cover all of my lost income.
Like I said, it's been about 14 months since the fire, and I only had about
(20:27):
11 and a half months worth of rent or lost income for the rental income. income.
So I think since October, I've been paying the mortgage, the condo fees and
my insurance and all my other expenses for that property out of my own pocket
without any income coming in to cover it.
(20:49):
So it's been a very stressful situation and I'm kicking myself that I didn't
increase my coverage even more than I did.
But yeah, hopefully they'll be done building it soon.
Well, you live and learn, right? And you've gone through what sounds like the
worst case scenario with these three losses in such a short period of time.
(21:13):
So what would you tell others about how they can prepare for a potential worst case scenario?
Well, aside from, like we said, just doing your homework and making sure that
you understand your governing documents, that you understand what your deductibles
are, and talking to an insurance professional,
(21:33):
you know, some of the things, just practical things.
You know, make sure that you save all your important documents in a fireproof box.
You know, your birth certificates, your passports, anything that's difficult to replace.
(21:54):
And then any other document, scan copies to your cloud.
Save everything important to the cloud. Because remember, if you have a fire,
your computer might be destroyed.
My neighbor upstairs at my rental property had been writing a book for like
five years and he had like 13 chapters on his computer and the computer was
(22:19):
destroyed and he didn't have it backed up. So he lost all that work.
So, you know, saving things through the cloud definitely is a good idea. Yeah.
And if you're a landlord, make sure your tenant, require that your tenant has insurance,
renter's insurance, because, you know, their insurance is going to have to cover
(22:40):
any of their lost personal belongings and you don't want them to come after you.
So have it in the leaf that they have to do that.
So what's the biggest piece of advice that you would give to anyone listening
who, you know, how they can be prepared for something like this?
Just don't skimp on insurance.
(23:00):
I know that it hurts to pay it because it seems like something bigger.
If you're lucky, you're never going to have to use it.
And all that money that you spend is never going to get you anything.
But if you need it, you want to make sure you have enough of it.
(23:22):
So you'll be kicking yourself if you skimped and tried to
save 50 bucks a month when it could have made the difference between you having
a roof over your head for six months or a year for 18 months versus you becoming
financially destitute because you're trying to cover all these lost expenses.
(23:46):
So be prepared. That's your that's your advice. And that's good advice.
Yeah. And I appreciate you having me on because I really do hope that my experiences
will help people and help them think,
OK, maybe I should really look at my my insurance policies and see what kind of coverage I have.
(24:06):
Well, Denise, this was really great advice.
Thank you for joining me today for this episode of Community Matters Podcast
to share your insights on property loss and insurance claims.
And in your case, it was a firsthand experience, and that's always the best to learn from.
We're sorry you went through that experience, but hopefully our listeners will
(24:26):
learn from that. And thank you for tuning in to Community Matters.
We're glad to have your attention for a short time.
Thanks once more to the sponsor of Community Matters podcast, Hoffman Law, LLC.
Find them on the web at hoffman, H-O-A, law.com.
Interested in being a guest on an upcoming episode of Community Matters?
(24:48):
Reach out to me at tony, T-O-N-Y, at caikeystone.org.
And don't forget to subscribe to the podcast so you'll get notifications every
time we post a new episode.
Please share our podcast with your colleagues and friends as well.
For more resources and best practices on managing and governing your condominium,
(25:10):
cooperative, or homeowners association,
please contact CAI or visit our website at www.caikeystone.org.
Music.
Music.
(00:14):
The podcast that brings you conversations that are critical to managing and
governing condos, cooperatives, and homeowner associations.
I'm your host, Tony Campisi, Executive Director of the Keystone Chapter of Community
Associations Institute.
Tune in each episode for the insights and information that are key to inspiring
(00:37):
professionalism, effective leadership, and responsible citizenship.
Citizenship, ideals reflected in community associations that are preferred places to call home.
Today's episode focuses on property losses and insurance claims.
My guest today is Denise Adamic, CMCA AMS PCAM, Community Association Liaison
(01:00):
for the law firm Hown Williamson.
Denise spent many years as a community association manager and an apartment
manager. She also experienced three recent losses that resulted in major insurance
claims on properties that she personally owns.
Denise will share and talk about her unfortunate losses so we can all learn from her experience.
(01:24):
Before we get to today's topic, here's a brief word from our sponsor, Hoffman Law LLC.
I'm Ed Hoffman with Hoffman Law LLC. Hoffman Law LLC is a recognized leader
in community association law.
We're known for our responsiveness, legal acumen, leadership in the association
(01:45):
industry, and our unwavering focus and commitment to education.
You can learn more about us at our website, hoffmanhoalaw.com.
Hoffman Law LLC is proud to sponsor this episode of the Community Matters Podcast. podcast.
Denise, welcome to Community Matters Podcast, and please tell our listeners
(02:07):
a little bit about yourself.
Hi, Tony. Thank you so much for having me. My name is Denise Adamek.
I am the Community Association Liaison at Horn-Williamson. We're a law firm
that services community associations.
I work with Matt Collins, Esquire Extraordinaire, and I am a former Community association manager.
(02:28):
I worked as a manager for several years, as well as a manager for multifamily properties.
So I've been in the industry for about 22 years at this point.
Did you have, I'm sure you did, when you were a manager, I'm sure you had insurance
claims similar to the ones we're about to talk about that you've had personally.
(02:50):
Yes. As a manager, I saw, you know, many, many different types of insurance
claims, and they were kind of an eye-opener for me.
They made me realize what could happen.
And so I learned some lessons through there that kind of helped me in my own personal life.
(03:11):
Which is the whole point of this interview, I guess. Yes.
So you had three major insurance claims to properties that you personally own,
all within a three-year period.
That must have been, I guess, a nightmare scenario. Tell us about them.
Yes. I've had the pleasure of three major losses.
(03:31):
The first was in August of 2019. I live in a town home and my neighbor's house
had a catastrophic fire.
Their home was completely destroyed.
Well, the inside of it, there was a lot of structural damage,
but it didn't have to be demoed. But my home suffered a lot of smoke damage.
(03:54):
They had to take out some drywall to make sure there were no embers burning inside.
But because I was adjacent to the townhome that suffered the significant damage
and because we had shared walls...
I was displaced for three months while the contractors and the engineers and
(04:15):
the township and everything did what they had to do.
So that was my first brush with a major insurance claim.
My second claim was at a rental property that I own and the neighbor's water
heater leaked and caused a bunch of damage to my property.
(04:35):
There was a lot of drywall that needed to get it replaced. The entire floor
throughout the apartment had to be replaced.
It was about $20,000 worth of damage.
And so my tenant was inconvenienced and it was just a mess.
And then my third was a fire that occurred in October 2022.
(05:01):
So about a year and four months ago, I had a catastrophic fire at the rental property that I own.
It's an eight-unit building, and pretty much the entire building was destroyed
due to an electrical fire.
And so my tenant was displaced. The building had to be completely demoed,
(05:22):
and they are still building, rebuilding.
So it's been about 14 months, and it's still not rebuilt. So that was a lot of fun.
Thankfully, nobody was was hurt yes fortunately no one else heard in any of
the the situations the the water leak.
And the building loss same
(05:44):
unit right same tenant yes yes okay so
within within three months my tenant had you know a major water loss and then
she literally you know that was put back together and literally like three or
four weeks after that the fire happened so it was awful yeah that That can be traumatic for anybody,
(06:05):
one incident, let alone two.
Yeah. So you were a community manager prior to your work at Martin Williamson.
How did that experience help you prepare for, I guess, primarily,
and then navigate these three losses?
So I used to manage a community that was plagued with water leaks,
(06:28):
whether it was a water heater or a sprinkler going off or...
Facade leaks. There were constant problems. And I witnessed homeowners there being displaced.
A lot of these losses resulted in their units being condemned for many,
(06:49):
many months while they rebuilt.
And we had several residents and owners that were displaced for several months at a time.
And some of them ran out of insurance for their living expenses or,
you know, so that really was a learning experience for me.
(07:11):
And I called my insurance company after seeing all of this happen.
And I was like, look, I want to make sure that if I'm ever displaced,
I have enough coverage to last me as long as it's going to take to rebuild my
property. So I increased all my coverage on both my properties.
And ironically, maybe two or three months after that, I had my first fire.
(07:35):
And because of that, because of what I had seen happen to some of my residents,
I was very cautious about how I used what coverage I had available to me.
Because you only get a certain limit of living expenses.
So I knew that I had X amount of money to last me however long it was gonna take.
(08:00):
And I had no idea how long it was gonna take for me to move back into my condo
after seeing how long it was taking all of my losses at the communities that I managed.
So I was very conservative. A lot of people will, you know,
move into a hotel, for example, like a residence in or a long-term stay hotel
(08:23):
where it's pretty expensive.
And that eats away at your coverage very, very quickly.
And that's why some of our residents ended up running out of coverage on their living expenses.
So that was the biggest thing that I learned from being a manager was to be
very conservative and to make
sure that I I had enough coverage for the out-of-pocket living expenses.
(08:46):
So had you not increased your coverage before the first of these three incidents,
as a result of your experience as a manager, you increased your coverage.
You wouldn't have had enough insurance to cover these losses, is what you're saying.
Well, the first one, I probably would have been okay, because I was only out
of my house for about three months.
(09:07):
And like I said, I was conservative with how I used my coverage.
I stayed with my parents for a few weeks and then I moved into,
I got a short-term, a two-month short-term rental and rented like the bare minimum
for furniture that I needed to survive.
So I was able, I was fine with that loss.
(09:29):
I did not have enough coverage for my rental property, but we'll go more into
that later. So what would you tell homeowners then?
What should the homeowners consider when purchasing their own property coverage?
So you really need to look at your governing documents and make sure you understand
(09:49):
what is and what is not covered.
You know, every condominium and every HOA is completely different and you cannot
make assumptions based on the look of the property.
For example, I live in a townhouse, so I have a three-story townhome that is
(10:10):
adjacent to another property.
But it's considered a condominium. So the condo covers the roofing,
the siding, the actual structure.
I'm only responsible for what's inside the walls.
Now, other townhomes, you do have to pay for the roofing, the siding, the structure.
(10:32):
So it's very important that you understand what your documents are and what they say.
And and whether it's considered walls
in which would cover you know your your cabinetry your cart your flooring your
you know all the other finishes back to build your grade or if it's walls out
(10:57):
where it's basically just the drywall and then you have to you have to ensure everything,
inside the unit so that's a big thing the other big thing is you have to understand
what your master policy's deductible is.
In both my properties, I think the deductible is $10,000.
So if there's an insurance claim that's $5,000, my homeowner policy is going to cover 100% of that.
(11:27):
The master policy isn't going to kick in. If it's above $10,000,
say it's in the case of my my water heater loss, the damage was $19,000.
So my policy covered the first $10,000 and then the master policy covered the remaining balance.
Now, some associations have premium or deductibles that are $100,000.
(11:51):
So if you're gonna have to be responsible for that $100,000,
you better make sure you have enough coverage for $100,000 worth of damage.
So it's just really important that you understand all those little details.
So talk to your insurance broker or your carrier and go over all those details
and make sure they understand what's going on.
(12:14):
And hopefully, if you're working with a good broker or carrier,
they're going to know what kind of questions to ask and what to look for to
make sure you're properly insured.
I know I heard in your answer there that you are basically saying,
I want to read the documents.
And I'm saying that with a little sarcasm because we hear that often in this industry, right?
(12:35):
Oh, yeah. I mean, I would never buy in an HOA or condominium without reading
my governing documents first.
It boggles my mind that there's so many people out there that don't do that.
But of course, we're also in the industry. So, yes.
(13:19):
Underwear your electronics like all that
stuff adds up really really really quick and you know
you gotta and i mean my neighbors the
first buyer they lost everything everything and
they didn't have insurance they didn't have they were tenants but they did not
have tenant renters insurance so they lost everything they owned so you just
(13:42):
gotta make sure you really take into account everything And some insurance companies
also require like kind of documentation of what you have. I was very lucky.
My, my insurance company.
Really did not nickel and dime me. I said, Hey, I, I, a pair of shoes got ruined
and they would say, okay, here market value for a pair of shoes is whatever.
(14:04):
And they would just add it to the, you know, to the tab.
So, and then finally, you know, try in the,
in a situation of a, a town home or a condominium, a condominium,
especially you're kind of at the mercy of of the association and the township
(14:25):
as far as how long it's going to take to rebuild.
So, you know, the association is going to have to go out to bid for sometimes
just the demoing of the property.
You need to have permits and then the engineering plans have to get drawn and
then they have to submit the permits to the township.
And there's just a really long process. And they told me from the get go with
(14:49):
my second fire that it was going to be about 18 months to rebuild like that.
That was right off the bat.
And in April, it will be 18 months. And I don't know if it's going to be done.
So when you plan on having at least 18 months worth of coverage for your out
of pocket living expenses,
(15:09):
if in the event that you have to move into another apartment or something, so you don't run out.
So I'm sure you had some unexpected expenses that were covered by your insurance. Tell us about that.
Well, one of the funniest, it wasn't really funny, but it was kind of funny
because it all ended up okay.
But during the day after the fire, the remediation company was there and I'd never had a fire before.
(15:35):
You know, this was my first time and I was still kind of in a state of shock
and they're there kind of cleaning everything up and they're like,
okay, well, we recommend that you send send all of your textiles to professional
cleaner to get all the soot and smoky smell out the textiles because that's
all toxic and everything.
And they're like, we have somebody we can recommend. So they came over and we're
(15:59):
walking through the house and I'm pointing at, you know, all the curtains and
the rugs and the pillows and bedding and towels and everything.
And they're gathering it all up.
And long story short, it came, that bill came to $24,000.
(16:19):
And I was like, what? Because half the stuff wasn't even really valuable.
You know, I'm not, I'm a frugal person. I don't spend a lot of money on that kind of stuff.
So that represented about half of what my coverage was for my personal belongings.
So I think I had about $48,000 coverage for my personal belongings,
(16:43):
which included any furniture that needed to be replaced, any clothing that needed
to be replaced, anything anything like that.
So I was in a state of shock because I was like, well, I don't know what else
I'm going to need to replace. And that's half of my coverage right there.
So I did end up disputing it with the company.
And my insurance carrier was able to get them to knock off, guess how much?
(17:07):
$10,000, which is an indication of how much they mark up those kinds of prices. is.
But just be aware that there's going to be a lot of unexpected expenses.
For example, remediation might have to come out of your pocket.
If they have to trash out your unit after the fire to clear it out,
(17:32):
they're probably going to bill you back for that.
So stuff like that that you don't really think about is all going to be covered
by your policy. I'll see.
That price differential also is indicative of some unfortunate practices that
happen in disasters where there are some people out there who try to take advantage
of you because they know you're in a difficult situation and you might not be
(17:53):
prepared to ask the right questions about prices.
And so that's a really good piece of advice there.
Yeah. And when I called the cleaners to complain about how much they charged,
because I felt like I got swindled, to be honest, us because there were certain
things that I was pointing out to them saying, oh, I don't know if I even want
to clean that. I might just throw it away.
(18:14):
And they were like, no, just just add it in. Who cares? You know,
might as well get it all clean.
And so I called the people and I was like, I if I had known it was going to
be this much, I never would have sent all my stuff.
And she's like, well, what do you care? Your insurance company is paying for it.
And I said, yeah, yeah, but it's coming out of my limit, my insurance, my coverage limit.
(18:37):
It's not infinite, you know? Like, I'm going to run out eventually.
So definitely think of all those scenarios.
What expenses were not covered by your insurance? Were there any that were not covered?
Well, I wouldn't say it wasn't covered, but I had to sit with the water heater loss.
(18:57):
My neighbor's water heater failed.
And he admitted to me that it was very, very old and that it was rusty.
And so in my mind, it was his fault that he should be responsible for the damage
(19:17):
to my unit because he neglected to maintain his property.
I personally had just replaced my water heater like six months before proactively
because I had seen how much damage a leaky water heater could cause.
So in my mind, I was like, why should I have to pay for this?
But my governing documents at that condo do not allow for subrogation,
(19:38):
which means no matter who's at fault,
your insurance company can't go to that other person's insurance company and
have them cover the cost.
So that was really upsetting to me. And I mean, in the end, I think I only had my.
Deductible was pretty low on that loss, but it still was frustrating to me.
(20:02):
And it seemed unfair that I should have to pay that when it wasn't my fault.
The other thing, sadly, even though I I increased my coverage on my rental property a few years before.
It was not enough to cover all of my lost income.
Like I said, it's been about 14 months since the fire, and I only had about
(20:27):
11 and a half months worth of rent or lost income for the rental income. income.
So I think since October, I've been paying the mortgage, the condo fees and
my insurance and all my other expenses for that property out of my own pocket
without any income coming in to cover it.
(20:49):
So it's been a very stressful situation and I'm kicking myself that I didn't
increase my coverage even more than I did.
But yeah, hopefully they'll be done building it soon.
Well, you live and learn, right? And you've gone through what sounds like the
worst case scenario with these three losses in such a short period of time.
(21:13):
So what would you tell others about how they can prepare for a potential worst case scenario?
Well, aside from, like we said, just doing your homework and making sure that
you understand your governing documents, that you understand what your deductibles
are, and talking to an insurance professional,
(21:33):
you know, some of the things, just practical things.
You know, make sure that you save all your important documents in a fireproof box.
You know, your birth certificates, your passports, anything that's difficult to replace.
(21:54):
And then any other document, scan copies to your cloud.
Save everything important to the cloud. Because remember, if you have a fire,
your computer might be destroyed.
My neighbor upstairs at my rental property had been writing a book for like
five years and he had like 13 chapters on his computer and the computer was
(22:19):
destroyed and he didn't have it backed up. So he lost all that work.
So, you know, saving things through the cloud definitely is a good idea. Yeah.
And if you're a landlord, make sure your tenant, require that your tenant has insurance,
renter's insurance, because, you know, their insurance is going to have to cover
(22:40):
any of their lost personal belongings and you don't want them to come after you.
So have it in the leaf that they have to do that.
So what's the biggest piece of advice that you would give to anyone listening
who, you know, how they can be prepared for something like this?
Just don't skimp on insurance.
(23:00):
I know that it hurts to pay it because it seems like something bigger.
If you're lucky, you're never going to have to use it.
And all that money that you spend is never going to get you anything.
But if you need it, you want to make sure you have enough of it.
(23:22):
So you'll be kicking yourself if you skimped and tried to
save 50 bucks a month when it could have made the difference between you having
a roof over your head for six months or a year for 18 months versus you becoming
financially destitute because you're trying to cover all these lost expenses.
(23:46):
So be prepared. That's your that's your advice. And that's good advice.
Yeah. And I appreciate you having me on because I really do hope that my experiences
will help people and help them think,
OK, maybe I should really look at my my insurance policies and see what kind of coverage I have.
(24:06):
Well, Denise, this was really great advice.
Thank you for joining me today for this episode of Community Matters Podcast
to share your insights on property loss and insurance claims.
And in your case, it was a firsthand experience, and that's always the best to learn from.
We're sorry you went through that experience, but hopefully our listeners will
(24:26):
learn from that. And thank you for tuning in to Community Matters.
We're glad to have your attention for a short time.
Thanks once more to the sponsor of Community Matters podcast, Hoffman Law, LLC.
Find them on the web at hoffman, H-O-A, law.com.
Interested in being a guest on an upcoming episode of Community Matters?
(24:48):
Reach out to me at tony, T-O-N-Y, at caikeystone.org.
And don't forget to subscribe to the podcast so you'll get notifications every
time we post a new episode.
Please share our podcast with your colleagues and friends as well.
For more resources and best practices on managing and governing your condominium,
(25:10):
cooperative, or homeowners association,
please contact CAI or visit our website at www.caikeystone.org.
Music.
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