The story goes like this: A condominium association in South Florida incurred damage during Hurricane Wilma. The association called its insurer, which sent an insurance adjuster to inspect the damage.  The adjuster determined that the damages were below the deductible. The association’s board of directors considered re-opening the claim while there is still time. Based on unit owner complaint, the Board recently discussed hiring insurance professionals to determine whether the condominium sustained more extensive damage than that found by the insurance company’s investigation. Unit owners within the association have expressed their feelings that it is imperative to conduct this investigation before it is too late. The unit owners have even threatened to sue the board for its inaction if the appropriate steps are not taken.

This is a scenario that can occur with any condominium association. On May 17, 2010, my post, Condominium and Homeowner Associations’ Fiduciary Duties Particularly in Light of Approaching Statutes of Limitation, discussed an association board’s duties to ensure they have covered the bases in investigating a potential re-opening of an insurance claim before it is too late.

I am writing about this scenario again because it seems to be prominent in board members’ discussions as the five year anniversary of Hurricane Wilma (October 24, 2010) approaches. There is still some time for re-evaluation. As my father used to say to me “Don’t worry about what you need to do, just go do it.”

It is better for a board to take action now while there is time and know whether there is a basis to re-open a claim. This knowledge will allow for an informed decision before it is too late and can potentially avoid a lawsuit for breach of  fiduciary duties.

Associations with concerns should consult with experienced insurance professionals immediately to ensure they do not miss the deadline.

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