Loss Assessment for Condos

What is Loss Assessment coverage?

Loss Assessment coverage is protection condominium owners can use on claims involving the building structure or its common areas. In most condo communities, your homeowners association (HOA) has its own insurance that covers incidents outside of your personal unit. However, these claims sometimes exceed the HOA master policy limits. If that's the case, you and your fellow condo dwellers might be asked to step in and make up the difference. Condo Loss Assessment coverage can help you avoid paying out of pocket when a common area claim requires your individual assistance.

Potential hazards for condo owners

Major weather damage to the outside of the building
If hail or strong gusts of wind strip away parts of the exterior of your condo building, leaving $550,000 in needed repairs. Problem is, your HOA master policy only carries $500,000 in property damage coverage. In which case, the HOA might assess the extra $50,000 to the condo owners — if you're in (for the sake of easy math) a 50-unit building, that's $1,000 you have to cough up. Loss Assessment coverage can usually cover that cost, helping make sure untimely damage doesn't put unexpected strain on your personal finances.

How much Loss Assessment coverage do I really need?

When deciding how much condo Loss Assessment coverage to get, you should first take a close look at your HOA master policy. This will proffer insight into what the HOA is responsible for versus what you're responsible for, how high their coverage limits go, and whether they have special deductibles for certain hazards. It’s always prudent to purchase as much coverage as you can afford. Talk to your GHM agent about condo coverage to protect your life and home.