Loss Assessment Coverage

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What Is Loss Assessment Coverage?

Loss Assessment Coverage Loss assessment coverage is an optional endorsement that you can add onto your homeowners insurance or condo insurance policy. It helps protect you if you live in a shared community, like a condo or homeowners association (HOA), where you’re responsible for a portion of damage or loss in a common area.
 

How Does Homeowners Insurance Loss Assessment Coverage Work?

Members of homeowners or condominium associations pay fees for certain services or amenities in the shared community. These fees go toward a community HOA insurance policy, often referred to as a “master policy.”
 
A master policy helps cover losses in common areas, up to coverage limits. If the claim cannot be fully covered by the master policy, HOA members may need to pay a share of the remaining amount. Members may also have to pay if there’s no coverage by the homeowner or condo association’s insurance for a specific loss.
 
Most condo or homeowners policies give you $1,000 of coverage towards the master policy limit or the deductible for a covered loss. For extra protection, you can get a home insurance endorsement that’s just for loss assessment coverage.
 

What Does a Loss Assessment Cover?

If you’re a property owner in a shared community, a loss assessment can help pay for:
 
  • Liability costs
  • Medical expenses
  • Property damage
You can count on this endorsement to help pay for these, if damages to shared areas exceed your HOA’s master policy limits.
 
Keep in mind that loss assessment coverage doesn’t help pay for property improvements like re-paving roads or putting a new roof on a club house.
 
To learn more about loss assessment and what homeowners insurance covers, talk to our representatives today at 888-413-8970.
 

Damage to the Building

If a storm tears shingles off your building’s roof, unit owners may need to help pay for repairs if the HOA master policy is not enough.
 

Damage to Shared Property

If a fire damages shared areas in your condo’s building, like elevators or the lobby, and they exceed the HOA master policy’s limit, you may need to help pay for repairs. You also may have to help pay your HOA’s master policy deductibles if damages impact all members equally. In situations like this, your portion of the deductible amount will be split with other home or condo owners in the HOA. If a fire destroys a shared area of your condo’s complex, like the lobby, loss assessment coverage can help pay damages that exceed the master policy deductible.
 

Injury in a Shared Area

Visitors come in and out of your HOA common areas all the time. But what happens if someone sprains their ankle in the pool? Your HOA liability insurance will help cover the cost of the claim.
 
However, if the injured person’s medical treatment expenses exceed your HOA liability limit, then you’ll likely have to help cover the costs that remain. This is where loss assessment coverage protects you.
 

How Much Loss Assessment Coverage Do I Need?

Before you determine how much loss assessment coverage you need, you’ll first want to ask yourself how much homeowners or condo insurance do I need? To find the answer, look at your community’s bylaws. These will state limits for your homeowners and condo insurance coverages. This will likely include how much loss assessment you should buy.
 
As you review your condo or homeowners association’s requirements, you’ll also want to look at its master policy limits. This can help you figure out how much extra coverage to get so you can avoid paying out of pocket if damages exceed the master policy coverage amount.
 
To learn more about home and condo insurance coverage or to file a claim, call our representatives at 888-413-8970.
 

Get a Quote for Home Insurance Loss Assessment Coverage

It’s also easy to get a free online quote for loss assessment coverage, homeowners insurance and other policies with us. Our online quoting tool will help guide you through the condo insurance and home insurance quoting process.
Summaries of coverages and policy features are for informational purposes only. In the event of loss, the actual terms and conditions set forth in your policy will determine your coverage.

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