If you have been taking a look at your policy or different types of coverage, you may have found yourself thinking, “what is loss assessment on a condo policy?” In a nutshell, loss assessment is a type of insurance coverage that protects owners of a shared property, such as a condo or co-op. This coverage usually applies to situations where you, a condo owner, are being held financially responsible for some of the costs of damage or deductibles. While you may think that your condo is in perfect shape, you never know when you may need to make unforeseen repairs. Loss assessment coverage can save you a tremendous amount of money and protect you against unexpected expenses that you may not be prepared for. It can especially help you if your building has not been properly insured by your HOA, as loss assessment coverage can help you pay for any damages that may not already be covered under the condo’s HOA policy.
What Does Loss Assessment Cover?
If you’ve been wondering, “does condo insurance cover special assessments?” the answer is no – these will usually be paid for out of pocket by the condo owners. However, loss assessment can help with this – it can cover most damages that your HOA condo policy is not already covered. This includes:
• Natural disaster or weather damage to the exterior of the building – If there is some damage caused by weather to the exterior of the building that is not covered by your association’s insurance, you can cover your part of the cost with loss assessment coverage by filing a claim with your insurer.
• Injury in a common area – If someone is injured in a common area such as a stairway or pool, your loss assessment coverage can cover any of the medical expenses or legal costs that exceed the HOA’s policy.
• Damage to shared property located inside the building – If a covered peril (such as a fire) damages anything within a common area, your loss assessment coverage can help you pay any repair costs that may arise.
• Master policy deductible assessments – If your HOA has a master policy deductible, loss assessment coverage can help cover your costs if you are responsible for paying a portion of the deductible after a covered loss occurs.
• Natural disaster or weather damage to the exterior of the building – If there is some damage caused by weather to the exterior of the building that is not covered by your association’s insurance, you can cover your part of the cost with loss assessment coverage by filing a claim with your insurer.
• Injury in a common area – If someone is injured in a common area such as a stairway or pool, your loss assessment coverage can cover any of the medical expenses or legal costs that exceed the HOA’s policy.
• Damage to shared property located inside the building – If a covered peril (such as a fire) damages anything within a common area, your loss assessment coverage can help you pay any repair costs that may arise.
• Master policy deductible assessments – If your HOA has a master policy deductible, loss assessment coverage can help cover your costs if you are responsible for paying a portion of the deductible after a covered loss occurs.
How Much Does Loss Assessment Coverage Cost?
Loss assessment coverage is an optional coverage, but it is worth it. Though you may already have loss assessment coverage included in your HO-6 insurance policy (AKA condo insurance), you may not be covered for a considerable amount. In most cases, you may only be covered up to $1,000. Purchasing an endorsement may only cost around an extra $25 to $50 a year and can cover you up to $100,000. How much loss assessment coverage you choose to get will depend on several factors, such as:
• The number of additional amenities in your complex – The more areas that can be damaged, the more coverage you may need.
• The number of condo owners in your building – The more owners there are, the less coverage you may need
• The number of additional amenities in your complex – The more areas that can be damaged, the more coverage you may need.
• The number of condo owners in your building – The more owners there are, the less coverage you may need
How to Get Loss Assessment Coverage
As mentioned previously, loss assessment coverage is probably already included in your HO-6 insurance policy. However, you may not be covered for a sufficient amount, so it may be a good idea to purchase an endorsement from your insurance provider. Suppose you are unsure of which type of coverage you need. In that case, you can shop around to see the policies that different insurance companies offer. Often, it’s best to consult your broker or insurance representative to discuss your options and help you find the best loss assessment coverage for you. Companies will offer different insurance coverage levels, so you must purchase the right one to cover you the best.