March 31, 2016

On Businessowners form BP 00 03 01 01 10, a condominium association filed claim when a unit, which was rented out, was damaged when the tenant shot and killed his wife. The tenant's carrier denied the claim. The unit owner and condo association have presented a claim under the association's policy stating that it is primary under Conn. Stat. Sec 29, Section 47-225. Does this statue call for the association policy to be primary and cover all damages, including tenants improvements and betterments?

Virginia Subscriber

The actual reference in the Connecticut statutes is 47-255.

In section (b)(1), the statues says that if the building contains units that are divided by horizontal boundaries described in the declarations or by vertical boundaries comprising or located within common walls between units, the insurance would "include the units, and all improvements and betterments installed by unit owners, unless the declaration limits the association's authority to insure all improvements and betterments or the executive board decides, after giving notice and an opportunity for unit owners to comment, not to insure such improvements and betterments." So, while this is governed somewhat by statute, it depends on how the units are divided, what the policy says, and what the board and the unit owners have decided regarding insuring improvements and betterments.

In section (d), the statute says that "if, at the time of a loss under the policy, there is other insurance in the name of a unit owner covering the same risk covered by the policy, the association's policy provides primary insurance." If both the unit owner's and the association's policies do cover improvements and betterments, the association policy is primary.