A waiver of subrogation in insurance policies for associations is always a thing of mystery. However, a recent case occurred that I believe requires community association managers and boards to pay more attention to this issue.
Most association by-laws require that the association’s insurance policy include a waiver of subrogation. This waiver of subrogation within the insurance policy will prohibit the insurance company from seeking reimbursement of monies paid to the association from any party, as that party is defined within the insurance policy. However, in this recent case, the association’s insurance policy did not have the wavier of subrogation anywhere and therefore the insurance carrier was able to proceed against certain parties.
Association managers needed to make certain the insurance professional provides the association a writing, after the policy has been obtained, indicating where exactly within the policy the appropriate waiver of subrogation language is set forth. Knowing this information will provide the association with the level of comfort it is entitled to under the terms of the insurance policy.