With Insurance Claims, Time Is of the Essence

In our upcoming special November issue, “Governing Powers Through a Legal Lens,” several prominent lawyers advise boards and the residents of co-ops and condos on the vagaries of establishing liability for leaks, fires, and other unwelcome mishaps. Their advice, though varied, contains a thread: when filing an insurance claim, time is of the essence. 

A story in Brick Underground illustrates why. In 2012, a leak damaged the downstairs apartment and the apartment below that apartment. In trying to determine the source of the leak, the co-op severely damaged the apartment in the middle. After renovating their bathroom, the couple in the middle apartment now wants to file an insurance claim against the co-op. Are they too late?

Probably, according to Brick Underground’s panel of experts. "If you have photos of the damage, the company may accept the claim, although typically there is some requirement to report claims within some period of time," says Michael Rothschild of the property management firm AJ Clarke.  "It would be very difficult to make a claim against the co-op due to the amount of time that has passed, as well as having  to prove that they were negligent in their actions." 

"Insurance companies want to be put on notice promptly so that they can view and estimate damages," adds insurance broker Jeff Schneider of Gotham Brokerage. "They also want to investigate the cause of loss for possible recovery against the responsible party." 

The problem when a claim is presented so late, Schneider says, is that the company is "unable to make a determination of the extent of the original damages because repairs have been done. The situation is the same if the responsible party can no longer be located or, say, the defective valve responsible for the damage has been replaced and thrown out." 

Even so, it's still worth filing the claims, Schneider says, especially if you have photos and dated, detailed invoices for the repairs. Any claim should be presented to their insurers of the building and the upstairs neighbor. But it’s never a good idea to wait five years to file such claims.