“Special Assessment.” Two words that strike fear into the heart of every community manager and board member. While I can’t make those words go down any easier, did you know there is insurance coverage available to help owners pay for insurance-related special assessments?

“Loss assessment” coverage is available on most homeowner policies. In fact, most have $1,000 of coverage already built in, with higher amounts available. If your association has an insurance claim and needs to assess the membership to pay for damages over the limit the HOA has on their policy, loss assessment coverage may help you pay for it. Remember it must be a covered cause of loss for this coverage to kick in.

Loss assessment coverage is also available to condominium owners on their earthquake policies. With limits ranging from $25,000 to $100,000, this coverage is available to unit owners whether or not their HOA carries earthquake insurance on the community. If the HOA does have earthquake coverage, and the unit owners are assessed an amount to pay the earthquake policy deductible, or the HOA does not have an earthquake policy and issues a special assessment to pay for earthquake damage, this type of loss assessment coverage will help unit owners cover those costs.

If you are concerned about paying for a special assessment if your community has a large insurance loss, ask your homeowners insurance agent about loss assessment coverage.

Terri Guest is the Northern California Sales & Marketing Representative for Berg Insurance Agency and can be reached at Terri@berginsurance.com. Have an insurance question? Ask Terri and your question may be the subject of next month’s edition of Coverage Corner! If your question is picked, you will win a gift card!