GREEN SHEET REDIGEST
HB 426 2019 Regular Session Hilferty
CONDOMINIUMS: Provides with respect to insurance coverage in condominium
units
DIGEST
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 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.
Page 1 of 2
Prepared by LG Sullivan. 6. Remove any liability of the association policy to cover any damage for which
the unit owner is liable.
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Insurance to the
reengrossed bill
1. Specify that the association may pursue expenses not covered by the
association's insurance policies from the negligent unit owner.
Page 2 of 2
Prepared by LG Sullivan.