I am a landlord in Chicago. I own a unit on the 3rd floor of an apartment building that I currently have tenants living in. Last month, I had a leak in the refrigerator water supply line that caused some water damage to the walls/baseboards of my unit. In addition, the water supply line leak also leaked into my neighbors unit (directly below) as well and caused some damage to their cabinets and ceiling. I filed an insurance claim with my own insurance company which included a 1st party claim for the water damages to my own unit, as well as a Liability claim for the damages to my neighbors unit. After several weeks of investigation and adjustors coming out to both units, we received a letter from my insurance company stating they are denying the claim for my neighbors unit, due to the fact that they found no negligence on my behalf (water supply line leak was accidental and corrective action was taken immediately upon notice), and that after careful review of the Condo Association Bylaws, they found language in the Bylaws that requires all insurance carriers to waive their right of subrogation against the association or any unit owner. It was suggested in this letter from my insurance company that my neighbors should file a claim with their own insurance company. A similar letter informing of the claim denial was also provided to my neighbors.
Today, I received a note from my neighbors confirming they received the above mentioned letter and that they will not be filing a claim with their own insurance company and would like to have the Maintenance dept of the Condo Association perform the work to repair the damages and bill me directly.
I would like to resolve this situation in the most respectful way possible and avoid any confrontational or hostile-like situations from arising! I would like to respond by kindly requesting my neighbors to file the claim with their own insurance company (after all, what is the purpose of insurance???) and that I would be happy to write them a check for their deductible amount that they may have to pay.
Would you all agree with my course of action? Any additional insight or advice regarding this? I would like to move forward with a solution that makes sense for both parties, but I also don't want to create any kind of tension with my neighbors.
I can 100% understand where your neighbors are coming from. They likely fear filing with their insurance will result in higher monthly payments.
I had a somewhat similar situation when I had a condo. The upstairs neighbor's shower was leaking down and caused mold on the wall.
I told the condo board and they claimed I couldn't prove it was their unit and that they can't require the upstairs neighbor to see if he's at fault because that would require him breaking the tile in his shower.
Fast forward to shortly before I moved - someone bought the first floor condo next to mine and when they were renovating they were shocked to find mold behind their wall - and they were able to trace it to the upstairs neighbor.
Well that proved it and I was able to get a major repair in my unit which included a nice new glass shower stall (the old glass stall was nice but dated and it needed to be removed to redo both the wall and ceiling). Awesome, as I sold the property with those nice new updates.
Condo boards are typically pretty weak but if your neighbor can prove you caused the damage to his/her unit they can simply sue you and you'll have to pay fees on top of that. Just pay to fix the damage and apologize.
I would probably pay your neighbour and be done with it. Chances are his deductible is higher than th ecost of repair.
I would also not have a fridge with a water supply. They are notorious for causing leaks and regularly need repair. Get rid of it before it leakes again.