Industry groups rally in response to Maryland condo law change
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Karen Robison
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Industry groups rally in response to Maryland condominium law change
IA&B proposes stakeholder agreement
Condominium associations and insurance agents were left scrambling when the Maryland Court of Appeals recently ruled against a long-standing insurance practice for insuring condominiums. Insurance Agents & Brokers of Maryland is working to resolve the issue via an agreement among affected parties.
The court held that the Maryland Condominium Act does not require the condominium association’s master insurance policy to cover damage to an individual unit. Instead, it would be covered by an owner’s individual policy.
“The recent decision has altered 26 years of a common interpretation of the act,” said Reese Cropper, an IA&B member and owner of Insurance Management Group, Inc., an agency in Ocean City, Md., that represents over 300 condominium associations. “Having one master policy is the only way an association can be assured it will not have units sitting in disrepair because of an owner’s lack of attention to their personal insurance needs.”
The court’s decision does not forbid a master insurance policy to cover individual units in addition to common elements. Since most policies are written to provide such coverage, IA&B proposes that condominium associations update their bylaws to eliminate references to the Maryland Condominium Act and to specifically reference coverage for individual units.
Condominium associations have responded favorably to the proposal, so IA&B is working with carriers to gain support for modifying the master policy language to match.
“We have been in discussion with insurance companies’ lobbyists and will continue to reach out to the carriers,” said David Rosenkilde, chairman of the IA&B of Maryland. “We’re optimistic that we can reach a quick and painless resolution.”
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