Insurance Loss Assessment

Started by MichaelS56 • 5 replies • 237 views

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MichaelS56 (Minnesota)
Posts: 858

Posted:

A nearby HOA is looking at increasing their Loss Assessment (deductible) that each owner would be responsible for in their HO-6 policy of either $40,000 or $50,000. What is a common deductible that are with HOA's?

MaxB4
Posts: 3,513

Posted:

It should be based on the probability of a special assessment for damages that the HOA has to coverage in the event of a flood or maybe a slip and fall settlement.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

For those unfamiliar with Loss Assessment Insurance:

Loss assessment coverage can help if there's an accident in a shared area of your condo property, such as pools, stairwells, or clubhouses. Normally, your association's master policy provides coverage for these incidents, but if the amount of damage exceeds the master policy's limits, you may be responsible for the difference along with other residents in your development. Condo policies typically provide $1,000 for loss assessment coverage, but you can often purchase an optional endorsement to increase the limit.

Same article recommends 20% of your units value.

SheliaH (Indiana)
Posts: 6,964

Posted:

Every HOA is different, so you'll rarely find a common anything. For example, I live in a townhouse community, so my loss assessment coverage is likely different from someone who lives in a high rise or another person who lives in a single-family detached unit.

You don't say if this "nearby HOA" is your own - if you don't live there, worry less about them and more about your own. The answer to what your community needs will depend on what common areas you have and possibly the strength of your reserves (in case that money has to be tapped for major repairs). My policy has a $1000 deductible but the amount of coverage is about $5,000.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By SheliaH on 12/20/2021 4:11 PM
Every HOA is different, so you'll rarely find a common anything. For example, I live in a townhouse community, so my loss assessment coverage is likely different from someone who lives in a high rise or another person who lives in a single-family detached unit.

You don't say if this "nearby HOA" is your own - if you don't live there, worry less about them and more about your own. The answer to what your community needs will depend on what common areas you have and possibly the strength of your reserves (in case that money has to be tapped for major repairs). My policy has a $1000 deductible but the amount of coverage is about $5,000.

This is used a association places a special assessment on its owners. For example, if your association has to do major reconstruction after a hurricane and the loss is $5M more than the insurance coverage and you have 100 owners. Each owner's special assessment obligation would be $50,000. A separate Loss Assessment coverage of $50K would cover your portion.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By JohnC46 on 12/20/2021 1:34 PM
For those unfamiliar with Loss Assessment Insurance:

Loss assessment coverage can help if there's an accident in a shared area of your condo property, such as pools, stairwells, or clubhouses. Normally, your association's master policy provides coverage for these incidents, but if the amount of damage exceeds the master policy's limits, you may be responsible for the difference along with other residents in your development. Condo policies typically provide $1,000 for loss assessment coverage, but you can often purchase an optional endorsement to increase the limit.

Same article recommends 20% of your units value.