An owner's insurance company sent our HOA a subrogation demand. How should the board respond?

By OurHOA · General information · Revised October 18, 2026

How an HOA board answers a subrogation demand from an owner's insurer: send it to the association's carrier, check maintenance duties, waivers and deadlines.

Part of the HOA board handbook: vendors, projects and upkeep.

The short answer

A subrogation letter means an owner's insurance company paid that owner for a loss, usually water damage, and now wants the association to pay it back because it believes the association caused the loss. Do four things in the first week. Do not pay it, and do not admit fault in writing or on the phone. Send the letter to the association's own insurance agent as a liability claim, the same day if you can. Pull the declaration's maintenance section and every record on the part that failed. Then send the insurer a two-sentence note saying the matter is with the association's carrier. Most of these demands end up being settled between two insurance companies. The board's job is to get its carrier what it needs and keep its own record clean. Rules vary by state and by each community's governing documents, so treat this as general education, not legal advice.

What the letter is and why it came to you

Subrogation lets an insurer that paid its customer step into that customer's place and go after whoever caused the loss. In an HOA the facts are usually ordinary. A common roof leaks into a townhome. A shared supply line between two condos bursts inside the wall. A common drain backs up into a ground-floor unit. A tree on common area drops a limb on a garage. The owner files with their own carrier, gets paid, and a few weeks or months later the carrier's recovery unit writes to the association. The letter usually lists the amount paid, the date of loss, a claim number, a one-line theory such as 'the association failed to maintain the roof,' and a date to respond, often 30 days out. That date is the insurer's request, not a court deadline. Answer it, but never pay just to meet it. Many demands also include the owner's deductible, because insurers often try to recover it for their customer at the same time.

Send it to the association's carrier first

A claim that the association negligently damaged someone's property is exactly what the association's general liability coverage is for. Colorado makes associations carry it: CRS 38-33.3-313(1)(b) requires commercial general liability insurance for claims arising from the common elements, to the extent reasonably available. Most declarations elsewhere require it too. Liability policies almost always require prompt notice of a claim and bar the insured from making voluntary payments or admitting liability without the insurer's consent. A board that writes a $4,000 check to make the letter go away may learn its carrier will not reimburse it. Send the agent the demand letter, the date you received it, the declaration and any maintenance chart, work orders, vendor invoices and inspection reports for the failed component, photos, the incident report, emails with the owner, and any minutes where the problem came up. Ask for the claim number and the adjuster's name in writing, and ask whether any deductible applies to liability claims under your policy. If the carrier answers with a reservation of rights, our guide on how to respond to a reservation of rights letter from the HOA insurer covers that step.

Check who was responsible for the part that failed

The demand is only as strong as its claim that the association was responsible for the part that failed and did not take care of it. Start with the maintenance section of the declaration. State law fills the gaps. In a Texas condominium, Property Code 82.107(a) makes the association responsible for the common elements and each owner responsible for their unit, except as the declaration provides, and subsections (b) and (c) give owners the utility fixtures, windows and doors that serve only their unit. Colorado's CRS 38-33.3-307(1) sets the same split for common interest communities and says that whoever is responsible pays for prompt repair of damage caused when access is taken through a unit. In a Florida condominium, 718.113(1) makes common element maintenance the association's job, except limited common elements the declaration assigns to owners. In single-family and townhome HOAs in all three states, the declaration usually decides it alone. Responsibility is half the question. The other half is fault: did the association know, or should it have known, about the problem and fail to fix it in a reasonable time? A roof that leaked the night of a hailstorm is a different case from a roof owners reported four times over two years. Put every complaint, work order and vendor visit for that component on one dated list before the adjuster asks for it. Our guide on how to handle a water leak from common elements into a condo unit covers the repair side of the same events.

Look for a waiver of subrogation

Statutes and declarations often limit subrogation between an association and its owners, but usually in one direction. Texas Property Code 82.111(d)(2) and Colorado CRS 38-33.3-313(4)(b) require the association's policy to waive the insurer's subrogation rights against unit owners. Those clauses protect owners from the association's insurer. On their own, they do not stop an owner's insurer from coming after the association. Florida closes that gap for condominiums. Under Florida Statutes 627.714(4), if the association's policy does not give its insurer subrogation rights against unit owners, an individual owner's policy may not give subrogation rights against the association. Some declarations in every state also contain a mutual waiver that binds owners and their insurers. If you find either one, send the adjuster the clause with a short note naming the section. Whether a waiver applies to these facts is for the adjuster or the association's attorney to decide, not the board.

Know the deadlines that actually bind

The insurer stands in the owner's shoes, so it generally has the time the owner would have had to sue. In Texas, suit for injury to property must be filed within two years under Civil Practice and Remedies Code 16.003(a), and claims without a specific period get four years under 16.051. In Florida, an action founded on negligence has two years under 95.11(5)(a), and an action on a written instrument has five years under 95.11(2)(b). The declaration is a written instrument, so an insurer may frame the claim as a breach of it. In Colorado, tort actions have two years under CRS 13-80-102(1)(a) and contract actions three years under 13-80-101(1)(a). When the clock starts is a legal question, so do not calculate it yourself. Two practical points follow. A demand can arrive more than a year after the leak, which is why the association should keep work orders and vendor reports for years, not months. And if the association is ever served with a lawsuit over the same loss, send the papers to the carrier that day. The time to answer runs from service, and a missed answer can lead to a default judgment.

Wording the board can copy

Acknowledgment to the owner's insurer: 'We received your letter dated [date] about claim [number] for a loss at [address] on [date of loss]. The association has reported this matter to its insurer, [carrier], under claim [number]. Please send further communication to the adjuster, [name, phone, email]. This letter is not an admission of liability or a waiver of any right or defense of the association.' Motion for the next board meeting: 'I move to ratify the president's report of the [insurer] subrogation demand dated [date] to the association's liability carrier, to authorize the president to provide association records to the carrier's adjuster, and to direct that no director discuss fault or payment with the owner or the owner's insurer except through the carrier.' Where your state and documents allow the board to discuss a threatened claim in closed session, talk it through there and take the vote in the open meeting.

A sample timeline

Day 0: the demand arrives. Scan it and note the date received. Day 1: the president or treasurer reports it to the agent and asks for a claim number. Day 3: the acknowledgment goes to the owner's insurer. Day 7: the records packet goes to the adjuster. Day 14: if no adjuster has called, follow up with the agent in writing. Day 30: the insurer's response date. By now the adjuster should have contacted the insurer or asked for more time. Months 2 to 4: the two carriers trade documents and either deny, split or pay the claim. When it closes, record the outcome in the minutes, file the whole packet with the association's insurance records, and ask whether the maintenance plan or reserve schedule should change because of it.

Mistakes that make these claims worse

The costliest mistake is a friendly phone call to the owner that includes 'we should have fixed that roof years ago.' That sentence will appear in the insurer's file. Others come up again and again. Paying the demand from the operating account without the carrier. Ignoring the letter because the association is run by volunteers, which only moves the next notice to a process server. Sending the insurer a long argument about fault when the carrier's adjuster should be making it. Throwing out old work orders. Treating the owner as an opponent: the owner usually did nothing more than file a claim on their own policy, and fines or a cold shoulder from the board will not help anyone. Keep the owner informed in general terms, keep fault discussions with the carrier, and let the insurers do the work they are paid for.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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