What to do if I own a condo on third floor and my water heater burst flooding my unit and 2 units down below but I have no insurance?

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What to do if I own a condo on third floor and my water heater burst flooding my unit and 2 units down below but I have no insurance?

I have no insurance (stupid of me). The first floor unit has already filed claim with their insurance company. The second floor is rented out and I don’t know if there’s home insurance or not but the tenant has renter’s insurance. Now I’m worried sick about the pending expenses. Am I liable to pay all the expenses for other 2 units? The water heater had been in good working condition all those time. It’s not like we can predict it would burst open all of sudden.

Asked on July 1, 2014 under Real Estate Law, Tennessee

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

Absent other facts not presented, you appear to be responsible for the damage to the neighboring units. To the extent that at least one of the other units had insurance of their own covering the damage, those owners can make a claim under their policy. However, their insurer will then “subrogate” the claim on their behalf. This means that it will be able to step into the shoes of the homeowner and sue you for the damages that it had to pay out. The homeowners may also have a deductible that they will be responsible for, so they could then bring a small claims suit against you to recoup that money. To the extent that 1 of the units may not have had any applicable insurance coverage, then you would most probably be liable for all of the damages that they incurred as a result of your water heating bursting.

That all having been said, there may be extenuating circumstances regarding your financial responsibility. For example, the WH burst due to a problem with the pipes inside of the wall, in which case you may get some relief from liability. Also, the WH itself could have been defective so you may have a cause of action against the manufacturer.

Right now what you should do is to pull out the paperwork that you received when you closed on your unit and read the part that applies to a situation such as this. If you are unclear as to what to do after that, you should seek help from a real estate attorney.


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