Is this bad faith? (sorry, kinda long)

[cadpig]

What is the name of your state? California

After sustaining extensive water damage due to a toilet overflow upstairs, we weren't sure if it would be covered by our association's insurance or not. (Somehow we were not made aware during the purchasing process of our home that we should also have seperate unit owner's ins.) After hearing first one thing, then another, we were finally informed by the insurance company itself that the association told them to go ahead and process the claim. A check was sent to the property management company and deposited, about 2 months after the damage occured.

I tried for almost 2 weeks to get ahold of the the company to collect the monies for the emergency service and to find out how we needed to go about getting the repairs done. My calls were not returned, etc. After calling every 1/2 hour or so today, I finally was able to speak with the property manager who said they weren't even sure yet if they would be doing anything for us. When I mentioned they had already received the check from the insurance company, he said they were holding onto it and might be sending it back. I checked with the insurance company myself and found they had deposited the check a week ago. I called the property manager back and told him this, and he just said they might pay back the insurance company, and that I had to go to the next association meeting to "make my case" to the board. They already know the details and circumstances and an insurance claims rep came out to assess the damage a long time ago.

I think this is ridiculous. We are living with holes in our walls and everybody is avoiding us and dragging things out too long. Why would they go ahead, process the claim, accept and deposit a check, and then say to us they aren't going to cover it? Even if they could have declined from pursuing the claim to begin with, is it now bad faith for them to do this to us? Especially because the manager flat out lied to me about not depositing the check? What can we do?

Thank you,
Michelle

 

[ALawyer]

There have been dramatic increases in insurance rates and some companies have stopped writing coverage or dropped those making claims. Unjustified claims raise a condo association's rates.

IT is the insured, not you -- you're the guys who disregarded the association's advice to buy your own insurance.

While this is rather unusual, the insurance company is certainly not guilty of bad faith -- it even paid a claim that it possibly should not have. Is the condo association guilty of bad faith? Not in my book, but that's not an insurance law question.

 

[tammy8]

How in the world of finance were you NOT made aware that YOU did not need atleast a condo owner's policy. That is the one thing that mortgage company requires and I have NEVER been aware of a company lending money for property without at least a condo owners policy. Seems a little strange to me.

 

[cadpig]

well....

we were never advised to get a unit owner's policy, so we didn't "ignore" anything. The mortgage lender didn't say anything because they only required the coverage provided by the association's insurance for the structural stuff. Yes, we were ignorant. But we are young and had never purchased a home before.

Anyways, my question of bad faith is towards the association because they have "failed to confirm or deny coverage of claims within a reasonable time" and to "acknowledge and act reasonably and promptly upon communications with respect to claims arising out of insurance policies". And besides that, they flat out lied to me.

Thank you for your responses. I'm just confused. They still haven't said they are or aren't paying for it.

Michelle