Many condo owners are unaware of what the implications that a lawsuit against their homeowners associate means to them. You know that your monthly dues go to paying for the HOA’s upkeep and maintenance, but did you also know that that money is important for protecting your financial interests as well?
It’s true. Association dues are used to purchase insurance coverage that, in theory, will protect all of its members. Unfortunately, that general liability coverage might not be enough to cover the damages paid out to a party that is injured while on your community’s common grounds.
For example, let’s say that someone is skateboarding in one of the community parking lots. If they are injured, they can sue your HOA. This very scenario played out in New Jersey in 2004, and the injured party was awarded a $1,500,000 settlement. The problem? The HOA only had general liability up to $1,000,000, and that means it was the homeowners who had to foot the remainder of the bill.
This is where loss assessment coverage comes in.
What is loss assessment coverage?
Loss assessment coverage can protect community property owners (like those who own condos) from claims that arise due to the use of the community’s common areas or parking lots. It helps to ensure that you will not have to pay out of pocket to cover your HOA’s insurance policy deficiencies.
Just like any other insurance policy, there is a cap on how much coverage you may purchase. Ask your agent about our limits, and just how much you will need to protect yourself.
What else does loss assessment cover?
Loss assessment coverage can also help you pay when weather damages the outside of community buildings, or when shared property inside the buildings have been damaged (like elevators, carpeting or inner walls).
For more information on Loss Assessment coverage contact a Joyce, Jackman & Bell Insurors agent today!
The Value of Loss Assessment Coverage
IRMI – Los Assessment
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