HLS 19RS-763 REENGROSSED
2019 Regular Session
HOUSE BILL NO. 426
BY REPRESENTATIVE HILFERTY
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
CONDOMINIUMS: Provides with respect to insurance coverage in condominium units
1 AN ACT
2To amend and reenact R.S. 9:1123.112(C), relative to condominiums; to provide with
3 respect to insurance policies; to provide for a determination of liability; to provide
4 with respect to the primary association policy; to provide for coverage of betterments
5 and improvements; to provide with respect to a unit owner's property insurance
6 policy; to provide with respect to condominium bylaws; and to provide for related
7 matters.
8Be it enacted by the Legislature of Louisiana:
9 Section 1. R.S. 9:1123.112(C) is hereby amended and reenacted to read as follows:
10 ยง1123.112. Insurance
11 * * *
12 C. Insurance policies carried pursuant to Subsection A must provide that:
13 (1) Each unit owner is an insured person under the policy with respect to
14 liability arising out of his the unit owner's ownership of an individual interest in the
15 common elements or membership in the association.
16 (2) The association's insurer waives its right to subrogation under the policy
17 against any unit owner of the condominium or members of his household.
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1 (3) No act or omission by any unit owner, unless acting within the scope of
2 his authority on behalf of the association, will void the policy or be a condition to
3 recovery under the policy, and policy.
4 (4) If, at the time of a loss under the policy, there is other insurance in the
5 name of a unit owner covering the same property covered by the policy, the policy
6 is primary insurance not contributing with the other insurance. (a) A unit owner's
7 property insurance policy covering betterments and improvements shall be primary
8 for that unit owner's betterments and improvements to the extent of the value of the
9 betterments and improvements. The association property insurance policy shall
10 remain primary with respect to common elements, structural elements and
11 components, and fixtures and improvements of the condominium units that are not
12 classified as betterments and improvements to include damages caused by the event
13 giving rise to an insurance claim.
14 (b) For purposes of this Subsection, betterments and improvements include
15 upgrades or improvements to a particular unit that are of a higher quality than those
16 originally constructed within the units subject to the condominium regime. The
17 replacement of worn or obsolete items shall not be considered betterments and
18 improvements unless the items are upgrades or improvements that are of a higher
19 quality than generally exist within units subject to the condominium regime. For
20 insurance purposes, at the time of any loss, all unit improvements and betterments
21 shall be considered the improvements and betterments of the current unit owner.
22 (5) Nothing in this Section shall be construed to require the association to
23 insure a unit owner's individual liability except as set forth in Paragraph (C)(1) of
24 this Section. Nothing in this Section shall be construed to prevent the association
25 from pursuing any deductible or out-of-pocket expenses not covered by the
26 association's insurance policies.
27 * * *
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HB NO. 426
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 426 Reengrossed 2019 Regular Session Hilferty
Abstract: Provides with respect to the liability of condominium association and unit owner
insurance policies.
Present law requires that condominium associations purchase property insurance on the
common elements and units to insure against all risks of direct physical loss.
Present law also requires the association to purchase comprehensive general liability
insurance, including medical payments, covering all occurrences commonly insured against
for death, bodily injury, and property damage arising out of or in connection with use,
ownership, or maintenance of the common elements.
Present law requires the association policy to provide that each unit owner is insured under
the policy, that the association's insurer waives rights to subrogation against any unit owner,
that no act or omission by a unit owner will void the policy or be a condition to recovery.
Proposed law retains present law.
Present law provides that if at a time of loss, there is another insurance in the name of the
unit owner covering the same property, the association policy is primary. Proposed law
deletes present law.
Present law provides that the association insurance policy does not prevent a unit owner
from obtaining insurance for his own benefit. Proposed law retains present law and further
provides that when a unit owner does purchase a policy and a loss is sustained, the
association policy shall remain primary for the loss of common elements, structural elements
and components, and fixtures and improvements of the condominium units. The unit owner
policy shall be responsible for betterments and improvements installed by the unit owner.
Proposed law provides that betterments and improvements are upgrades that are of a higher
quality than those originally constructed within the unit.
(Amends R.S. 9:1123.112(C))
Summary of Amendments Adopted by House
The House Floor Amendments to the engrossed bill:
1. Clarify that the association's insurer waives the right to subrogation against a unit
owner.
2. Remove the provision indicating that the association bylaws shall rule when
determining liability.
3. Remove the requirement that the association policy is primary in instances in
which a loss would be potentially covered by the association policy and the unit
owner policy.
4. Provide that the association policy shall remain primary for the loss of common
elements, structural elements and components, and fixtures and improvements
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of the condominium units and that the unit owner policy shall be responsible for
betterments and improvements installed by the unit owner.
5. Provide that a feature shall not be considered a betterment or improvement unless
it is of higher quality than the item that it replaces.
6. Remove any liability of the association policy to cover any damage for which the
unit owner is liable.
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