Sprinkler water damage in a DC condo: HO6, master policy, and who pays the deductible

A sprinkler head in a condo puts out a fire or it puts out water, and either way the water goes down. In a four unit rowhouse conversion on Capitol Hill that means one head on the third floor wets three ceilings, two floors of hardwood, and the cellar storage cages. Our first 24 hours article covers the valve, the drying, and the head replacement. This one covers the money, which in a condo is split across two insurance policies and a set of bylaws most owners have never read. Knowing which policy answers for which part of the loss, before the adjuster calls, is the difference between a claim that closes in a month and a dispute that runs through the next annual meeting.

Two policies, one wet building

Every DC condominium association carries a master property policy on the building. The DC Condominium Act requires it, and the declaration and bylaws say what it covers. The unit owner carries an HO6 policy, the condo form, which covers what the master policy does not. Where the line between them falls depends on how the master policy is written. A bare walls policy stops at the drywall and leaves cabinets, flooring, and fixtures to the owner. A single entity or all in policy covers the unit as it was originally built, including the original kitchen and floors, and leaves only upgrades and contents to the HO6. Ask the property manager which form the building has. It is the first question the adjuster will ask you, and most owners do not know.

Where the water started decides who answers

The adjusters sort a sprinkler discharge by the location of the head and the cause of the discharge. A head inside your unit that opened on its own is a loss in your unit. The master policy covers the building parts it covers, the HO6 picks up your improvements and contents, and the bylaws decide whether the master deductible lands on you. A head in a common element, a corridor, a stair, the cellar storage room, is an association loss, and the deductible is spread across all owners through the budget or an assessment. A head in a neighbor’s unit is their loss, and the water that reached your ceiling is your loss, each on its own policy, unless someone was negligent.

Negligence is the fork. A head sheared off by a contractor’s ladder, a head used as a hook for a hanging plant, or a head cooked by a space heater that sat under it all winter is somebody’s fault, and that somebody’s liability coverage pays everyone below. Our accidental activation article lists the usual causes. A head that failed from corrosion, a manufacturing defect, or one of the recalled models still hanging in older DC buildings is nobody’s fault in the policy sense, and the association’s own maintenance record becomes the question.

The deductible is the whole fight

In most sprinkler losses the master policy pays, and the dispute is over who covers the deductible. Master deductibles on DC condo buildings have climbed in recent years, and water losses are the reason. The bylaws in many buildings let the board charge the deductible back to the unit the loss originated in, whether or not the owner was at fault, and our responsibility article flagged that clause as the one to read before anything happens. If your building has it, the deductible is your bill, and the loss assessment coverage on your HO6 is what pays it. If your HO6 limit for loss assessment is lower than the master deductible, the gap is yours. Call your agent with the master deductible figure from the manager and raise the limit. It is one of the cheapest lines on the policy.

What the adjusters will want

• The head. Bag the head that opened, label it with the date and the room, and do not let the restoration crew throw it away. The cause of the discharge is read off the head, and the recalled model question is answered by the stamp on it.
• The sprinkler contractor’s report. Whoever replaced the head writes down what they found, the model, the temperature rating, the condition of the bulb or link, and anything near it that could have set it off. We write this for every discharge call without being asked.
• The inspection history. A 13R building carries an annual inspection report, and the adjuster reads the last two. A head written up as painted or corroded and not replaced moves the loss toward the association. Our inspection intervals article explains what those reports contain.
• Photos and moisture readings. Every room, every ceiling, before anything is cut, and the drying contractor’s daily readings afterwards.
• The association’s incident report. The manager writes one. Ask for a copy the same week, and correct anything in it about your unit that is wrong before it becomes the record.

The order of calls

Management first, the same hour, because the master policy has a notice clause and the board controls the common element repairs. Your HO6 carrier the same day, even if you think the master policy covers everything, because late notice is the easiest reason to deny a claim. The sprinkler contractor to replace the head and restore the system, because a building with a closed sprinkler valve is a building under a fire watch, and our fire watch article explains what that costs the association per day. Then the drying contractor, one for the whole stack. Then your agent with the deductible question.

Keep the two claims straight in your own notes. The master claim has a number and an adjuster at the association’s carrier. Your HO6 claim has a different number and a different adjuster. They will each ask what the other is paying, and the owner who can answer that from a notebook is the owner whose claim closes.

Quick answers