Loss assessment coverage is typically found on a Condo Insurance Policy. However, you will also see it on a Homeowners Insurance Policy occasional. It is designed to cover you against shared, uninsured losses by a condo owners or homeowners association.
For example: if a major liability loss occurred in a common area, such as a swimming pool area, that exceeded the limits of the association’s insurance policy, the insurance will pay to the policy limits and any amount paid above that would be divided up equally by the number of members in the homeowners or condo owners association and billed to each of them individually. This billing is called an assessment. So, lets say there was a 1.5 million dollar lawsuit filed and the assocation was held legally liable for the enire amount of the lawsuit. Lets also assume the insurance policy had a one million dollar coverage limit and paid that amount. The additional 500k would still be due. If there were 100 members/property owners in the association, they would each be billed or “Assessed” $ 5000.
Loss assessment coverage will pay for these types of claims up to the limits purchased for this coverage. This is very important coverage to have if you own a condo or live in a homeowners association that has common areas that are equally owned by its members. Be certain to ask for this coverage when obtaining quotes for your insurance. The coverage is cheap in Texas and you’ll be glad you have it, if you ever need it.
For additional information regarding Loss assessment coverage on a Condo Insurance Policy, contact our office or visit our website at www.Quotes4insurance.com