Water rarely stays in one condo. A failed supply line on one floor can reach the ceilings of the units below. In a Chicago condo building, that raises two questions at once. Whose insurance responds, and who pays the deductible? Illinois law sets the baseline in Section 12 of the Condominium Property Act (765 ILCS 605/12). Your association’s declaration, bylaws and rules fill in the rest, and those documents vary from building to building.
What does the association’s policy have to cover?
Under 765 ILCS 605/12(a)(1), the association must carry property insurance on the common elements and the units, including the limited common elements. The board of managers may decide whether the bare walls, floors and ceilings of each unit are included. The policy must cover special form causes of loss and be written for at least the full insurable replacement cost of the insured property, less deductibles. The IDFPR condominium ombudsperson summarizes the same requirement.
Section 12 also sets these rules.
- Owner upgrades. The association’s insurance need not cover improvements and betterments installed by unit owners. If it does cover them, the association may charge the added cost to the affected units (12(b)).
- What counts as an upgrade. “Improvements and betterments” means decorating, fixtures and furnishings installed or added within the unit, including electrical fixtures, appliances, air conditioning and heating equipment, water heaters, built-in cabinets installed by unit owners and other upgrades (12(b)).
- Original fixtures. Fixtures inside the unfinished interior surfaces of the unit that the developer originally installed are common elements. Floor, wall and ceiling coverings are not (12(b)).
- Which policy goes first. If a unit owner has other insurance on the same property, the association’s policy is primary (12(f)).
- Who handles the claim. A covered loss is adjusted by and with the association. Proceeds go to the association or its insurance trustee and are used first to repair the common elements and the bare walls, ceilings and floors of the units (12(g)).
These provisions were amended by Public Act 98-762, and the changes apply to policies issued or renewed on or after June 1, 2015.
Who pays the condo insurance deductible?
The board decides, within three options listed in 765 ILCS 605/12(c).
| Board option under 605/12(c) | Who ends up paying |
|---|---|
| Pay the deductible as a common expense | All owners, through the association |
| After notice and an opportunity for a hearing, assess the owners who caused the damage or from whose units the damage originated | The owner of the source unit |
| Require the owners of the affected units to pay | Each owner whose unit was damaged |
Your declaration or board rules may say which option your building uses. Ask management for the current rule in writing.
Can the board require you to carry your own insurance?
Yes. Under 765 ILCS 605/12(h), the board may require unit owners to carry insurance for personal liability and for damage to another unit. That includes damage caused by the negligence of the owner or the owner’s guests, residents or invitees, and damage “regardless of any negligence originating from the unit.”
When the board requires this coverage, the statute says the owner’s personal liability must include the deductible of the owner whose unit was damaged, damage not covered by the required insurance, and items like decorating, painting, wall and floor coverings, trim, appliances, equipment and other furnishings.
What does an HO-6 policy usually cover?
The Illinois Department of Insurance describes the HO-6 condominium form as covering a condo owner’s personal property and additions and alterations made to the inside of the unit (Shopping for Homeowners Insurance). Its Property Insurance Consumer Guide adds that the unit owner is generally responsible for insuring personal property and betterments and improvements, while the association may cover fixtures and equipment originally installed in the unit.
Triple-I explains that master policies handle units in one of two ways. Some insure units as originally built, including standard fixtures, so the owner insures only alterations such as a remodeled kitchen or bathroom. Others insure only the bare walls, floor and ceiling, leaving the owner responsible for items like cabinets, built-in appliances, plumbing and wiring. Triple-I says the unit owner’s policy covers personal possessions and structural elements the master policy leaves out, plus liability and additional living expenses. It also lists unit assessment and water backup among coverages owners can add.
Here is where to look first for common items after a leak.
| Damaged item | Where to look first | Source |
|---|---|---|
| Roof, basement, boiler, walkways and other common areas | Association master policy | Triple-I |
| Bare walls, floors and ceilings of your unit | Association policy, unless the board decided otherwise | 605/12(a)(1) |
| Fixtures the developer installed within the unit’s unfinished surfaces | Association policy, as common elements | 605/12(b) |
| Floor, wall and ceiling coverings | Your HO-6 and your declaration | 605/12(b) |
| Owner-installed cabinets, appliances or water heaters | Your HO-6, unless the association covers them | 605/12(b), IDOI |
| Furniture, clothing and electronics | Your HO-6 | IDOI, Triple-I |
| Hotel stay while the unit is repaired | Your HO-6 additional living expenses | Triple-I |
Who is responsible when water comes from another unit?
The statute does not assign fault for every leak. It does give the board several tools.
- The board’s powers and duties include providing for the operation, care, upkeep, maintenance, replacement and improvement of the common elements (765 ILCS 605/18.4(a)).
- The board may have access to units as necessary to maintain, repair or replace common elements, or to make emergency repairs that prevent damage to the common elements or other units (18.4(j)).
- After notice and an opportunity for a hearing, the board may assess the deductible against the owner from whose unit the damage originated (12(c)).
- The board may require each owner to carry coverage for damage to another unit (12(h)).
The rest usually comes down to your building’s documents. Triple-I says the division of responsibility should be in your association’s bylaws. That is why two Chicago buildings can treat the same leak differently.
What should you do right after a condo leak?
- Stop the water if you can do it safely. Shut the fixture or unit valve, and call building management so they can check the units above and below.
- Tell the board or management in writing. Losses under the association’s policy are adjusted by and with the association (12(g)).
- Call your agent. Report the damage under your HO-6, even if you think the association’s policy will respond first.
- Take photos before cleanup. The Illinois Department of Insurance advises photographing damage before you begin cleanup, where it is safe.
- Start drying quickly. The EPA says to dry water-damaged areas and items within 24 to 48 hours to prevent mold growth. Our water damage restoration and burst pipe water damage pages explain how we do that.
- Ask for the documents. Request the declaration, bylaws and any board rules on insurance and deductibles.
Our insurance claims page covers how we document a loss for more than one policy.
This article is general information, not legal or insurance advice. Declarations vary, so read your own declaration, bylaws and policy, and talk with your agent, your association or an attorney.
When to call a restoration company
Call when water has reached your unit, whether it started with you, a neighbor or a common pipe. A person answers 24/7. We ask what happened, which units are affected and whether management knows. Then we send a crew to find the source, remove water and start drying. We document everything, unit by unit, so the association, the owners and each insurance company have a clear record. Contact us any time.