Loss Assessment Coverage is only added to your policy when your house or condo is part of a Homeowners Association or HOA for short. If you do not live in an area that has an HOA then you do not need loss assessment coverage.
What is Loss Assessment?
Loss assessment is when a common place is damaged and everyone that is involved with the HOA pays a fee to have the damage repaired. This fee can either be used to cover the HOA's master policy deductible or in worse cases the money that the master policy cannot cover.
For example, if your HOA's master policy covers up to $200,000 and the damage done to a common area is $225,000. With loss assessment, you and the others that live under the HOA would be responsible for paying the $25,000.
Loss Assessment Coverage: Loss assessment coverage is an optional coverage that will either cover or help cover the expenses we talked about above. This type of coverage can be very useful for condo owners as they are likely to have less neighbors than for example, a gated community, so Loss assessment will tend to cost more.
Do you have an HOA and are still wondering if you need loss assessment coverage? Give AZ Insurance Team a call today! (480)-535-5709.
Independent insurance brokerage located in Tempe, AZ. We offer auto insurance, homeowners insurance, life insurance, renters insurance, commercial insurance…
Disclaimer: Coverage will vary on state, insurance company, and type of policy.
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Information credit: https://www.progressive.com/answers/loss-assessment-coverage/
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