Hurricane/Flood - Three High Rise Condominium Buildings

Challenge

Following Hurricane Ian, a three-tower, twelve-story condominium complex suffered severe damage from both high winds and extensive storm surge flooding. The total estimated damages exceeded $30 million, affecting all floors of the buildings.

The core challenge was the complex separation of damages and costs between the wind and flood insurance policies, particularly for essential, shared services:

• Widespread Destruction: Flood waters (reaching six inches into the second floor) destroyed all ground-floor infrastructure, including electrical rooms, the central fire pump system, and elevator shafts. Wind damage affected every floor, impacting roofing, windows, and stucco.
• Shared Costs Dispute: Allocating the $5.8 million expense for temporary power, generators, and building stabilization was a major point of contention. The electrical infrastructure was destroyed by flood, an act of nature, but power was needed for all repairs, including wind-related items across all twelve floors.
• Negotiation Needs: A methodology was required to fairly apportion these shared costs between the primary flood, excess flood, and wind carriers, while adhering to Florida state statutes for condominium policies and the specific verbiage of the private flood policies.

Solution

PLC, managing the primary and excess flood claims, engaged specialized building consultants and forensic engineers to provide an objective, data-driven analysis and negotiation framework.

• Expert Damage Assessment: Consultants performed a detailed, multi-peril assessment, meticulously documenting which damages were caused by wind and which by flood, establishing a clear line between the two events.
• Cost Allocation Model: The consultants developed a defensible methodology to allocate the shared costs (temporary power, generators). By linking the duration and power requirements of these services directly to the scope of specific wind vs. flood repairs, they created a proportional split.
• Collaborative Negotiation: Through multiple construction meetings involving all stakeholders—contractors, engineers, consultants, adjusters (EGAs), and the owners—PLC facilitated a collaborative environment. This transparency helped build consensus around the consultant's findings.
• Avoiding Litigation: PLC utilized the consultant's expert analysis as the foundation for negotiations, allowing all parties to understand and agree upon the proposed settlement without resorting to legal action.

Results

The strategic use of building consultants and a collaborative approach led to a successful and timely resolution of the complex claim.

• $0 Litigation Costs: The detailed assessment and open dialogue prevented litigation, saving significant time and legal fees for all parties involved.
• Efficient Settlement: The claim was brought to final resolution efficiently, and the insured did not feel the need to hire a public adjuster, which often runs up costs and extends timelines.
• Equitable Allocation: A fair and agreed-upon percentage split for the $5.8 million in temporary power and stabilization costs was reached, satisfying all wind and flood carriers involved.
• Successful Recovery: The condominium association received an equitable settlement, allowing for the comprehensive repair and restoration of the three towers.