Loss Assessment Insurance
You live in a condominium association and happily (ok, probably not “happily”) pay your dues each month. Your board has diligent members and your association is well insured. What could go wrong? Well, lots can go wrong, unfortunately. Life is full of unexpected twists and turns. A slip and fall accident might find the association on the wrong side of a lawsuit. Or, the association might discover hidden property damage that must be repaired. There is a myriad of unforeseen liabilities that an association may incur.
Hopefully, the association’s insurance is sufficient. If not, unit owners can expect a special assessment to cover any gap in funding. So, what is an owner to do when faced with an unexpected and sometimes significant special assessment? Sadly deplete the Hawaii vacation fund? Try to convince yourself that little Johnny is probably going to get a scholarship and raid his college fund? Sell blood and plasma until you look like a Portlander in winter?
Most owners living in a condominium community purchase insurance for their individual units. This insurance usually contains some level of loss assessment coverage. The limits vary, but hopefully the coverage will provide a safety net for the unanticipated assessments faced by owners. It should be noted that not all assessments are covered under this insurance. Unit owners, board members, and community managers should be versed on this coverage prior to issuing the special assessment in order to maximize the chances of recovery.
On October 27th at the OWCAM Continuing Education Meeting, the great Tim Cline and I will be providing an in-depth look at loss assessment coverage, among other topics. We encourage you to attend and learn a bit more about a coverage that may provide a huge boost to your communities. You can find more information by clicking here.