Condominium associations in Illinois are required by law to carry property insurance that covers the common elements of the property. Unit owners are responsible for insuring their units. When there is damage to a unit or the common elements, however, there is often a lot of confusion regarding who is responsible and how a claim should be handled.

Here are a few basic tips regarding insurance and insurance claims in condo buildings in Illinois:

  1. The association's insurance policy covers damage to the common elements, up to the drywall/primer in the unit. Any original fixtures in the unit (as installed by the developer) are generally also covered.
  2. Unit owners are responsible for damage to the paint or other wall or floor coverings plus the contents of their units (personal belongings). Tile, carpeting, flooring, wall paper, etc. are therefore the unit owner's responsibility. Unit owners should have an HO-6 insurance policy in place to cover their unit contents. 
  3. Insurance typically covers only the damage resulting from an event, not the cause of damage from lack of maintenance. If a roof leaks because a tree falls on it, an insurance policy would likely cover repairs to the roof as well as repairs to the damaged common elements. If a roof leaks because the association has not replaced or repaired an aging roof, an insurance policy maycover resulting damages but not roof repairs.
  4. If a problem originates from within a unit (leaking toilet or bathtub, broken in-unit water heater, fire) and leads to damage to the common elements and/or another unit, the association must address the repairs of the affected common elements. If a claim is made, the association's deductible is chargeable back to the unit that caused the damage provided there is evidence to support this. Damage to portions of the units not covered by the association's policy must be handled by the unit owner(s). 
  5. It is often most effective for the association to file an insurance claim, determine what is covered, charge back any deductible to negligent units as applicable and then allow the unit owners to work out any uncovered repairs to units with their respective insurance carriers. 
  6. Whenever there is a need to make repairs to portions of the building from the drywall out into common walls, the association should be involved. It is not advisable to allow unit owners to handle their own repairs if it means going into walls. The association should ensure that licensed and insured contractors are handling any necessary repairs to the common elements in order to mitigate additional damage.

Handling insurance claims can be complicated. Coverage will be dictated by your association's Declaration and by your existing insurance policy.

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