How does neighbor's insurance company determine if my condominium unit's plumbing caused water damage to neighbor's flooring?

Check With your Condo Association first.

Your Condominium Association would usually have a Master Insurance Policy that covers losses from common owned property, structural components and conveyances and liabilities. This would generally include Plumbing in exterior and common walls and possibly resulting water damges.

Generally a Carpenter or Inspector will inspect the damaged flooring down to the sub flooring if necessary and trace the water stains or rot back to teh source. Water damage can can be higly visible and easily traced by a Carpenter once the damage area is exposed, often even without esposing it. Water damage is one of the more common property loss exposures.

If there is no water source for the damage in the inspected unit and it tracks back through a common wall, then it's fairly easy to determine the source of water damage.

Check with your Condo Association first as they may have the coverage needed for community loss exposures.