Condo ownership means sharing both benefits and financial responsibilities with your neighbors. When major building repairs exceed your association’s insurance limits or reserves, you could face a hefty special assessment bill. Loss assessment coverage protects you from these unexpected expenses that can easily reach thousands of dollars per unit. At Gateway Property & Casualty, serving Dover, NH and Augusta, ME, we make sure condo owners understand this crucial but often overlooked coverage option.
How Loss Assessments Actually Work
Special assessments happen when your condo association needs money for major repairs or improvements that aren’t fully covered by their master policy or reserve funds. Think roof replacement after storm damage, elevator modernization, or extensive water damage repairs. The association divides these costs among all unit owners based on your ownership percentage. Without loss assessment coverage, you’re personally responsible for your entire portion of the bill.
Real-World Assessment Scenarios
Loss assessments commonly arise from natural disasters, building system failures, or liability claims against the association. Hurricane damage to the building exterior, boiler replacement, or lawsuit settlements can trigger assessments ranging from hundreds to tens of thousands of dollars per unit. Even routine capital improvements like parking lot resurfacing or building exterior updates can result in assessment charges to unit owners.
Coverage Limits and Considerations
Most loss assessment coverage offers limits between $1,000 and $50,000 per occurrence. Choose your limit based on your building’s age, condition, and typical assessment history in your area. The coverage typically applies only to assessments stemming from covered perils under your condo policy.
Don’t get caught unprepared for unexpected assessment bills. Contact Gateway Property & Casualty, serving Dover, NH and Augusta, ME, to add appropriate loss assessment coverage to your condo insurance policy.
