Insurance coverage can be confusing, especially when it comes to your home. When you add in shared spaces that you’re partly responsible for financially, things get even trickier. Loss assessment coverage is a term you’ve probably come across if you have purchased or are thinking of purchasing a condo or a home with communal spaces.
We’ll dive into exactly what it means, what it covers, and why you might need it below, because protecting your biggest financial investment is key.
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Loss assessment coverage is designed to protect you from that portion of the damage for which you’re on the hook. A simple loss assessment coverage definition is insurance coverage and financial protection for homeowners in developments that have shared area and therefore shared financial responsibility. Loss assessment coverage protects you from property losses and claims for that shared space, as well as liability coverage in case someone is injured in the shared area.
Loss assessment coverage relates to:
Loss assessment coverage protects these areas from property damage, liability costs and medical expenses. This is when natural disasters strike (like tornados or wind damage), or if a visitor is injured on the shared property and incurs medical expenses.
It’s important to note as well what loss assessment coverage doesn’t cover: just like homeowners insurance, there are important exclusions that you’ll want to know about upfront. Loss assessment coverage doesn’t pay for property improvements, of course, or natural wear and tear, but it also doesn’t cover any damage not specifically covered in your loss assessment coverage policy. Understanding the restrictions and limits of your loss assessment coverage policy is crucial to being prepared should something happen.
Loss assessment coverage is separate from your condo homeowners insurance policy. If you’ve purchased homeowners insurance, it may likely have loss assessment coverage for your condo already built in. If you’re shopping around for homeowners insurance and have a condo, make sure your policy includes loss assessment coverage so that you’re protected as much as possible.
To choose the right amount of loss assessment coverage, make sure you know the deductibles of your HOA’s master policy; this will help you make an educated and financially practical choice when it comes to purchasing insurance to protect your home and shared space.
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When it comes to protecting your home and financial assets, being prepared is key. Choosing loss assessment coverage protects your financial interests when it comes to shared spaces in your condo or shared community, and including it in your homeowners insurance just makes good sense.
Lauren Lewthwaite Lauren Lewthwaite has been freelance writing for almost five years writing content that ranges from health to insurance and everything in between. Lauren is also a trained translator in French and English and is a dog-mom to an adorable Australian Shepherd.
