Dry Rot on window on home we just purchased?

We just recently bought a house that is 8 years old. We were measuring windows for custom blinds we wanted and my husband took the existing blinds down on the dinning room bay window. One of the windows looks like it is dry rotting on top behind the blind. I looked through the closing paper work but did not find any information for such a pre existing condition. I am new at this and not sure what to do about this. Is there anything I can do about it? Maybe contact home owners insurance (they have not sent us the policy yet so i could not check for it its allstate)? Would they cover such a thing since it was pre existing when we bought the house? Any idea? Thanks in advance.

Your or their homeowners policies will not covere it. Theirs may have but they do not own the property anymore. Did you have a home inspection prior to purchase. If you did you may have some recourse with the inspector.

But, you do not have dry rot. This is a moisture problem. Repair is of the existing damage is doubtful. Your goal now is to prevent further damage. Check the weatherstripping and things like that. How old is the house? Were they installed correctly? If the cirrent damage is severe your best option is to replace then windows.