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Fires from a Neighboring Unit

Your insured's apartment, condo, townhome, or business is damaged by a fire that started next door, above, or below. Your insured did nothing wrong, so the question is what started the fire in the other unit and why it spread. The fire may be electrical, a product, cooking, smoking, or a contractor's work, and the party responsible could be the neighbor, the landlord, the condo association, an electrician, a manufacturer, or the builder. Because the fire started in someone else's space, getting access to the origin unit is the first hurdle.

What it coversAccess to the origin unit, landlords, associations, firewalls, renters policies

Step-by-step checklist

Identify

Contact the claim adjuster right away. Ask them to hold the scene and for permission to retain an expert at the client's expense. Note the call in the file.
On every claim, ask the client whether they want an origin and cause investigator to review the scene, or confirm one is already assigned. Note their answer in the file so the decision is on record.
Make sure no evidence is touched or moved until the expert has secured the scene
Get the client's approval for the scene exam cost. Most run at least $1,600 with travel, the day rate, and expenses.
Confirm which unit the fire started in, from the fire department report
Identify who lives in or leases that unit, who owns it, and who manages the building
Find out the suspected cause in the origin unit

Hands off until the expert arrives. Nothing at the scene gets touched, moved, repaired, or thrown out until the origin and cause investigator has secured it. Evidence that's moved early can sink the whole recovery.

Notify

Retain an origin-and-cause expert right away
Put the occupant, owner, landlord or association, and their carriers on notice
Ask for access to the origin unit for a joint scene exam

Investigate

Hold the joint scene exam in the origin unit before debris removal
Look at why the fire spread: firewalls, firestopping, sprinklers, and smoke alarms
Get the lease or condo documents for the origin unit
Lab-test any failed product or electrical parts, then review the expert's report

Demand

Review payments and out-of-pocket costs
Sort the supports into photos, estimates, invoices, mitigation records, and reports
Send the full demand packet

Negotiate

Follow up. No response? Send the second demand.
Check condo documents and leases for waivers of subrogation
If liability is accepted, negotiate. If not, review for ADR.

Settle

Review the release
Receive payment, issue the deductible and client payments
Final file review, then close

1. Identify

Common ways these fires start

Electrical problems in the origin unit: overloaded outlets, extension cords, bad wiring, or a failed panel
Products: space heaters, lithium-ion batteries, e-bikes, dryers, and appliances
Cooking and smoking by the neighbor or their guests
Candles left burning
Contractors working in the origin unit, like electricians, plumbers using torches, or remodelers
Building wiring or equipment the landlord or association is responsible for

Why it spread matters too

Building codes generally require fire-rated walls and floors between units, and sealed gaps around pipes and wires. When fire spreads quickly through walls, attics, or crawl spaces, the builder, the remodeling contractor who cut through a firewall, or the owner who removed fire protection may share responsibility. Also check whether sprinklers and smoke alarms were required, working, and maintained.

Who may be responsible

What you find	Likely cause	Who may be responsible
Fire started from the neighbor's cooking, smoking, or candle	Occupant carelessness	The neighbor, and their renters, homeowners, or business carrier
Fire started at a space heater, battery, or appliance	Product defect or misuse	The manufacturer, or the neighbor
Fire started in the building's wiring or electrical panel	Building system failure	The landlord, condo association, or the electrician who last worked on it
Fire started during work in the origin unit	Contractor error	The contractor, and whoever hired them
Fire spread fast through walls or the attic	Missing firewalls or firestopping	The builder, a remodeler, or the owner
Smoke alarms or sprinklers missing or not working	Poor maintenance	The landlord or association

Responsible parties to consider

The occupant of the origin unit, and their guests
The owner of the origin unit, if different from the occupant
The landlord or property manager
The condo association or HOA, for common elements and building systems
Electricians and other contractors who worked in the origin unit
Manufacturers of products in the area of origin
The builder or remodeler, for firewalls and firestopping

Documents that matter

The origin unit's lease: who must maintain what, and what insurance the tenant must carry
Condo declarations and bylaws: who owns and maintains the wiring and walls, and any waivers of subrogation
For commercial space: the leases for both units, and any building rules on insurance and safety

2. Notify and investigate

Get into the origin unit. The fire started in a space your insured doesn't control. Ask the occupant, the owner, the landlord or association, and their carriers in writing for access to a joint scene exam, and ask them to hold the scene until then. If a carrier for the origin unit is already running its own investigation, ask to join it.

Who to put on notice

The occupant and owner of the origin unit, and their carriers
The landlord or property manager, and the condo association or HOA
Any contractor who worked in the origin unit
The makers of any product in the area of origin
The builder, if fire spread through missing fire protection

Evidence checklist

The fire department report naming the origin unit and suspected cause
Photos and video of the origin unit, the shared walls, the attic, and your insured's unit
Products and electrical parts from the area of origin, held for a joint exam
The origin unit's lease or condo documents
Building maintenance and inspection records, including smoke alarm and sprinkler inspections
Permits and invoices for recent work in the origin unit
Mitigation records for your insured's unit, including smoke and water damage from firefighting

Exams

Hold a joint scene exam in the origin unit before debris removal, with every party notified. Hold a joint lab exam before testing any product or electrical part.

3. Demand, negotiate, and settle

Liability theories

Against the neighbor: negligence, like leaving cooking unattended or overloading outlets
Against the landlord or association: negligence in maintaining wiring, fire protection, and smoke alarms, and breach of lease or condo duties
Against a contractor: negligent work in the origin unit
Against a manufacturer: product defect, failure to warn, and breach of warranty
Against the builder or remodeler: negligent construction of fire separations, subject to the statute of repose

Defenses to expect

Defense	How to answer it
The neighbor has no insurance	Look for other parties: the landlord, a contractor, a product maker, or the builder. Check whether the lease required the tenant to carry insurance.
The landlord isn't responsible for what a tenant does	True in general, but the landlord is responsible for its own building systems, fire protection, and smoke alarms.
The condo documents waive subrogation	Read the exact wording. Check who it covers and what kind of loss.
The damage in your insured's unit is only smoke and water	That damage was still caused by the fire. Document it with the mitigation records.
The builder is protected by the statute of repose	Check the state's repose period and the build or remodel date.

Negotiating and settling

Several units are often damaged. Expect other carriers pursuing the same parties, and consider working together on expert costs.
Renters policies often have low liability limits. Get the limits early and look for additional parties if the loss is larger.
Review the release with the release checklist, then close with the standard closing letter and the deductible reimbursement letter.

4. Letters for this loss

Step	Letter	Sent to
Identify	Subrogation Opening Letter to Insured	Insured: photos, what they saw, neighbor's name
Notify	Notice of Subrogation Interest and Insurance Request	Neighbor, owner, landlord or association, contractors, manufacturers
Notify	Notice of Subrogation Interest to Adverse Carrier	Each party's carrier
Investigate	Evidence Preservation and Joint Scene Exam Notice and to Responsible Party	All parties, with a request for access to the origin unit
Investigate	Joint Lab Exam Notice	All parties, before testing products or wiring
Demand	Subrogation Demand to Adverse Carrier	Carrier(s)
Negotiate	Second Demand with Escalation Notice, Tolling Agreement Request	Carrier(s)
Settle	Release Review Checklist, Closing (Made Whole) or Pro Rata, Deductible Reimbursement	Client and insured

Related guides: Tenant and Landlord Losses, Condo, HOA, and Neighbor Losses, Electrical and Product Fires, and Fire from Cooking, Smoking, and Candles.