Sharper Management


There’s no doubt that understanding insurance coverage in an Association can be confusing. One important distinction in your personal homeowner policy (commonly called an HO6 policy) is Loss Assessment coverage. Depending on the carrier, this coverage may be different from your real property coverage.  Real property coverage should cover your personal contents, coverage of building construction items like flooring and walls that may not be insured by the master association policy (which can vary greatly by Association) and, at a bare minimum, coverage of all of those covered components up to the Association’s master policy deductible. Loss Assessment Coverage can be different. Loss Assessment coverage will cover you should the Association assess a deductible or damages back to you.  For example, if your sink caused a backup and it flooded the floor below you, the Association may assess the master policy’s deductible back to you if it was a covered loss under the Association’s policy.  Another scenario is if there is a hailstorm that damages the roof of your building. The master insurance policy may cover it; however, the Association can make up the deductible by assessing it back to you and/or the other units affected. Finally, Loss Assessment coverage provides protection should there be a loss that exceeds the Association’s coverage amounts – or for items that may not be included in the overall coverage scope. One again, the Association could assess the overage or uncovered items back to you as a homeowner. You should talk to your personal insurance agent to ensure you have Loss Assessment coverage as part of your policy. At a minimum, it should be equal to the Association’s master policy deductible. You should also check your Association’s Governing Documents, as many Associations require homeowners to carry Loss Assessment coverage.

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