Why Insurance Claims in Shared Buildings Depend on State Law

You’re walking down the street, minding your own business.

You walk into a coffee shop to get a coffee before you head to work, and right when you’re getting out, you slip on some ice on the stairs and break your elbow. The owner of the building says they don’t have anything to do with that; the management company handles snow and ice, but the management company says the retail tenant is the one responsible for that staircase.

The contractor was never told they’re supposed to salt that specific area, and if you’re thinking the coffee shop’s insurer will help in any way, well… They’re hoping someone else will pay first.

It’s a mess, and it happens all the time in shared buildings.

Slips and falls are one of the most common nonfatal injury types in the U.S. – Centers for Disease Control and Prevention

But here’s where things get even more complicated: the same incident can end up differently depending on the state you’re in.

It’s the state liability laws that decide who pays and how much, and those laws can be very different across states.

The U.S. uses different negligence systems depending on state; comparative negligence allows partial recovery based on percentage of fault, while contributory negligence can bar recoveries entirely even with minimal fault. – Legal Information Institute

Why Disputes Over Insurance Are More Frequent in Shared Buildings

In a house that’s owned by one family, it’s clear who’s responsible for whatever happens. 

If someone falls in front of the house, the homeowner’s insurance covers that or doesn’t. End of story. But when you have shared buildings like apartment complexes, office towers, or any space of that kind, things are anything but simple. The main reason for that is the difference between private units and common areas.

Look at the parking garage under an apartment building, for instance.

There could be one policy that covers the structure, another that covers lighting and security cameras, and yet another one that covers the driving lanes. So, if someone slips in a garage, there’s 3 or 4 insurance companies investigating that slip at the same time.

And, as you can imagine, nobody wants to accept the fault and pay, so investigations drag on.

There’s more to this, though. 

A lot of shared buildings hire third-party maintenance vendors; a snowplow service, a cleaning crew, an elevator repair company, and so on. And let’s say an elevator jerks and hurts a passenger. Now, the building’s insurer wants to know if the repair company was following its contract, and the repair company’s insurer will ask if the building had an issue they knew about, but didn’t report. 

Everyone tries to wash their hands of the incident and blame someone else for it.

Once the investigation is done and insurers have collected their evidence, the dispute goes into a new phase. At that point, it’s up to the state’s negligence laws. 

They’re what decides how insurers calculate liability and payouts.

How Different States Handle Insurance Claims for Shared Spaces

One accident, several outcomes. It sounds like it makes no sense, but that’s truly how laws work. 

Let’s check a couple of examples.

Illinois

Illinois uses a modified comparative negligence system. 

In other words, an injured tenant can still get compensated if they’re less than 50% responsible for the accident. If they’re 20% at fault, for example, then the compensation gets reduced by 20%. 

Insurers are very thorough with investigations, and they’ll take plenty of time to look into the property owner’s negligence, as well as the tenant’s behavior.

It’s not uncommon for people to contact an unsafe property injury attorney in Chicago (or wherever else in Illinois) because there’s a lot of back-and-forth in these types of cases, and most people typically try shifting blame and sue for damages.

Virginia

Virginia follows a contributory negligence system, which is an old-school rule. According to it, if the injured tenant is even 1% at fault, they get nothing. 

Not even partial compensation. Insurance denies the claim, and that’s that.

Insurers in Virginia are extremely motivated to dig up any kind of evidence of partial responsibility, such as if the tenant was looking at their phone while walking or if they ignored a wet floor notice. Accident claims in Virginia almost never end up with a payment because insurers have to find the teensiest mistake on the tenant’s part, and the claim falls apart.

California

California uses a pure comparative negligence system. 

This is the most forgiving system of them all for injured tenants. Basically, a tenant could be 90% at fault for slipping and falling, and they can still get the remaining 10% of their damages.

Since this is the case, insurers don’t try to deny the claims outright. 

Instead, they’ll argue about the percentage of fault, and they’ll slice up the responsibility as much as they can. And even though a lot more claims result in payouts here than in Virginia, the amounts can still be pretty small if the tenants bear most of the blame

Conclusion

It almost feels a little ridiculous to have one incident end so differently, but that’s how state laws work. Yes, the tenant still fell and injured themselves, but they might get nothing if they live in Virginia, or they might get their medical bills covered if they’re in California.

Is this fair? Perhaps not. 

Perhaps it doesn’t seem fair that the state where the accident happened impacts the insurance as much as the accident itself, but that’s how it is.