Waukesha condo owners fear major losses if insurance doesn’t accept claims

WAUKESHA, Wis. — People who live in the condo that was evacuated last week in Waukesha now say they are worried insurance may not cover all of their losses.

Alicia Halvensleben is one of nearly 50 condo unit owners who will never be allowed to live in their building again after it was found to be structurally deficient. Halvensleben says each unit owner spent $13,000 to have their balconies removed only to find out the entire building may collapse.

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“Most of us owe on our mortgage, we have equity built up for some of us and obviously we’ve all paid to have the balconies removed, which is kind of a big concern because we’re out a lot of money if insurance doesn’t help us out,” she said.

While Halvensleben is thankful the building didn’t collapse on anyone, she fears she could be out tens of thousands of dollars if insurance doesn’t accept her claim.

“It’s not necessarily looking good for all of us at this point, but we haven’t gotten a solid yes or no,” she said. “This isn’t something that happens often especially in the wake of things like Miami. More often, if something this bad happens, it’s already collapsed rather than still standing.”

Ron Philleo is a Brookfield insurance agent who helps condo owners with coverage. Philleo says if the condo building would have collapsed due to sudden and accidental damage, similar to what happened to the Miami condo building in June, that would trigger an insurance payout, but since the building in Waukesha is still standing, Ron says the condo unit owners could be left with little recourse.

“There’s no damage to the building other than deterioration and some corrosion, and it sounds more like a maintenance issue. And typically that will not trigger an insurance contract,” he said.

Halvensleben says each condo owner has an insurance policy for their own unit, and collectively, they own the building through an association. Philleo says their only recourse may be through the association’s insurance policy.

“The association has a board and that board will typically carry directors and officers liability coverage. Basically it’s their malpractice coverage and the unit owners may be able to recover something under that coverage for failing to maintain the building properly.”

Philleo says even if that insurance claim is approved, the payout likely wouldn’t be enough to fully reimburse the individual unit owners.

“If I was a unit owner there, I would have a lot of concerns right now and this may not work out real well for them,” he said.

Halvensleben says she and other unit owners are unsure whether to keep paying their mortgage out of fears it could impact their credit score for purchasing their next home. Philleo says they should continue paying their mortgage until the insurance situation is resolved.

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