All You Need to Know about Loss Assessment Coverage for Condos
Loss assessment is a form of insurance coverage for condo owners. It offers protection in cases where you are the owner of a shared property, and are held responsible for part of the deductibles or costs for damages to the building, shared areas of the property, and injuries that occur in shared areas of the property. The amount to be paid by each owner is evaluated by the homeowners association or condo owners association. This is referred to as the loss assessment. To cover the damage, you will be required to pay your share.
Loss assessment also provides coverage for some losses where the homeowners association requires you to cover your share of damages that are not covered under the building master policy or exceed the coverage limit on the existing building or homeowners association insurance policy.
What Does It Cover?
Loss assessment could be applied to property damage, liability, or deductibles. It can apply to anyone who owns a unit within the shared community property that is usually managed by a homeowners association or a condo owners association. Loss assessment coverage can help to cover an insurance claim or damages that are not fully paid by the condo association’s policy.
For example, if insured damage happens to the outside of the building, resulting in $250,000 worth of damages, and the condo association only has $200,000 in coverage for the building, there will be a $50,000 repair bill that will not be covered by the insurance as it exceeds the coverage limit. Each owner in the association will have to cover a certain part of the $50,000. In this case, owners without loss assessment coverage on their insurance plan will have to pay the special assessment out of pocket. Owners who have a loss assessment can file a claim to cover the cost.
Also, if you have loss assessment coverage, it can help pay for your share of the costs if the condo association issues a special assessment to cover the association’s insurance deductible for a covered claim. However, loss assessment coverage does not pay for all assessments. For example, if the homeowners association issues a levy to cover damage that is not insured, loss assessment coverage will not cover the assessment.
How Much Coverage Do You Need?
To help calculate how much loss assessment coverage you need, you will need to check your condo or homeowners association insurance policy. You’ll need to review the coverage limits and whether there are special deductibles for certain hazards. A local insurance agent can help you calculate how much loss assessment coverage is right for you. Loss assessment coverage is very vital in protecting you from unexpected expenses that you may have to cover out-of-pocket. It also offers protection if the condo association has not insured the property properly or has taken a high deductible to save costs.
Do you have more questions about the loss assessment coverage for condos? If so, then contact the experts at James Page Insurance. We are ready to assist you with all your home coverage needs today.