What Is Loss Assessment Coverage on a Condo Policy?
Loss assessment coverage pays your share of a special assessment the association levies on owners after a covered loss to the building or common elements — including a shortfall between the master policy payment and the actual repair cost. Standard HO-6 forms include a small amount, often $1,000 to $5,000, which owners can usually increase for a modest premium. Call 516-410-0164 for a free claim review.
When It Applies
The coverage responds when the association assesses owners because of direct physical damage from a peril your policy covers. A fire damages the roof, the master policy pays less than the rebuild costs, the board assesses every owner $12,000 — that assessment is what this coverage addresses, up to your limit.
It generally does not cover assessments for deferred maintenance, reserve shortfalls, capital improvements, or losses from perils your policy excludes such as flood or earth movement.
How to Use It Properly
Notify your carrier as soon as the association announces the assessment, and gather the paperwork that ties it to a covered loss.
Key Takeaways
- Pays your share of a post-loss special assessment
- Base limits are low — often $1,000 to $5,000
- Can be increased by endorsement before a loss occurs
- May also reimburse a charged-back master deductible
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