What happens if my upstairs neighbor's pipe bursts?

Complete Guide to Neighbor-Caused Water Damage in Condos & Townhomes

Why This Question Matters for Colorado and Utah Residents

Water damage is the most common claim for condos and townhomes in Colorado and Utah, causing costly repairs and confusion over who pays. Unique building layouts, strict HOA rules, and active regional weather (hail, heavy rain, freeze-thaw cycles) make clear answers essential for local owners. Recent legal changes in Colorado further impact coverage and claims.

• Frequent Claim Type: 33% of condo claims in Northern Colorado involve water damage, often from neighboring units. Prompt, knowledgeable action can prevent delays and surprise costs.
• Complex Responsibility: Responsibility can involve your policy, your neighbor's, and your association's master policy—each with different rules under Colorado and Utah law.
• New Legal Precedents: Colorado’s 2023 Larimer County HOA v. State Farm ruling now requires HO6 condo policies to cover water damage from adjacent units, closing a common coverage gap.

What Most People Get Wrong

Many assume either the neighbor upstairs or the condo association automatically pays for all damages. In reality, coverage depends on where the burst pipe is located, what caused it, and your individual policy details. Fault and maintenance history often complicate the claims process.

Another misconception is that losses are always limited to structural damage. Actually, personal belongings and even temporary housing can be impacted—and not all policies cover every scenario.

The Complete Picture

When an upstairs neighbor’s pipe bursts, damage to your unit typically falls along three possible coverage paths:

• Your own HO6 condo policy usually covers your personal property, floors, walls, and sometimes additional living expenses, minus your deductible (average CO deductible $500-$1,000). With new Colorado rules, your policy must respond even if water comes from a neighbor’s unit—not just your own.
• The neighbor’s liability coverage comes into play if the leak resulted from their negligence, such as failing to repair obvious problems.
• The HOA master policy may apply if the burst pipe is part of the building’s shared infrastructure, but you may still owe a share of the master policy deductible (often $10,000+ in CO/UT) under your loss assessment coverage.

In practice, most owners start by filing a claim with their own policy to speed up repairs, then the insurance companies sort out who ultimately pays (“subrogation”). Be sure to document thoroughly and notify your HOA and upstairs neighbor immediately. In Utah, similar principles apply, but check for any additional HOA bylaws that may narrow or broaden your specific coverage.

Given rising water and weather-related claims—especially on Colorado's Front Range—local experts now recommend reviewing your policy for loss assessment, water backup, and personal property coverage limits to avoid gaps when neighboring units cause trouble.

Making the Right Decision for Colorado and Utah Residents

Question 1: What does your condo/townhome policy cover when damage starts elsewhere?

Don't wait until disaster strikes to learn what your policy actually covers. Ask your advisor or review these key points:

• Does your HO6 include water damage—even if it starts in your neighbor’s unit?
• Is water backup or sewer coverage included (usually not standard—must be added!)?

Question 2: How will your HOA’s master policy and deductible affect you?

Large HOA deductibles are common (often $10,000 or more in Colorado), and the association can bill you for your portion after shared-structure claims. Ensure you:

• Know the master policy deductible and how “loss assessment” applies to you
• Have enough coverage to pay potential assessments without a financial shock

Question 3: Are you prepared for claims involving multiple parties?

If your neighbor and HOA are both involved, claims can be complex and slow. Proactive steps include:

• Keep good home maintenance records to prove the damage wasn’t due to your own neglect
• Build positive relationships with neighbors and the HOA board—they’ll make a stressful situation easier and can sometimes facilitate claim resolution faster in Colorado and Utah communities