Understanding HOAs and Loss Assessment Coverage

HOA Information in San Diego, CA

The dues you pay to your homeowners association are meant to cover routine maintenance of the buildings and common areas, landscaping, and possibly even services such as trash pickup. However, your dues do not cover unexpected damages to the premises or personal injuries or property damage guests may experience while visiting common areas of the building. When situations such as these occur, the HOA may bill back a portion of the expenses to the individual property owners in what is called a loss assessment. The staff at American Tri-Star in Chula Vista discusses loss assessments and the situations where HOAs will and will not cover them.

Situations Where HOAs Might Cover Loss Assessments

The exact situations where your HOA can issue a loss assessment should be detailed in your association’s bylaws. When damage is done to common areas of the property, an HOA may issue an assessment to cover the association’s deductible under its master policy or to cover repairs beyond what the master policy covers. Association members may also receive a special assessment to cover personal injury or property damage claims that exceed the association’s master policy coverage.

Loss Assessment Coverage Under Home or Condo Insurance Policies

Most condo and home insurance policies contain language or riders addressing loss assessments. Many of these policies cover assessments as long as they are the result of a loss specifically covered under the policy. For example, you would be covered if your policy includes fire losses and the assessment was for fire damage to the community clubhouse. However, coverage does not extend to special assessments for deferred maintenance, including painting buildings or routine roof replacement.

Limitations of Loss Assessment Coverage

Chula Vista home insurance policies typically limit coverage for loss assessments to $1,000 per loss. It is possible to purchase additional loss assessment coverage, but the assessment must still be for a covered loss. Even with additional coverage, the $1,000 limit may still apply if the assessment is intended to cover the deductible under the association’s master policy.

To learn more about loss assessments and how to tell when they are covered, get in touch with Tri-Star Insurance. We are a leading provider of homeowners insurance, and we also offer commercial, health, motorhome, and cheap auto insurance in Chula Vista. Call 619-827-0522 today to speak with one of our knowledgeable agents and receive a complimentary quote.