Author – Chris Fantaski, Account Advisor – Horst Insurance
Loss assessment coverage is an important but often overlooked portion of a commercial condominium associations insurance program. This holds true for both business and residential condominium associations. This helps protect individual unit owners when the condominium association charges a special assessment to cover certain losses that exceed the associations coverage. This can also take place if certain types of losses may not be covered, or the loss falls below the associations deductible.
A loss assessment may occur when a condominium association must charge its unit owners for their share of a loss. This can happen when damage exceeds the policy limits, an associations policy has a large deductible, or if the associations coverage is not enough to cover the loss. A common assumption that is made by unit owners is that the associations master policy fully protects them.
To help determine the right amount of loss assessment coverage you should carry on your business or personal policy, you want to review the associations master policy to learn what the coverage limits are and what deductibles apply to certain types of losses. Your insurance agent can help you decide how much loss assessment coverage is adequate for you.
Hopefully, you will never have to use your loss assessment coverage. Having added it to your insurance policy will give you peace of mind that knowing you will be protected for a special assessment if something does occur.
