Summary: One of the coverages included within the homeowners policies and offered under the businessowners policies that is often confusing from both an underwriting and claims perspective, is loss assessment coverage.

Loss assessments often occur when a homeowners or condominium association assesses the residents a fee for loss to the community property. For example, the community sustains fire that damages the clubhouse, the pool, and other common areas. Owners may be assessed a portion of the loss.

Loss Assessment Coverage Options

For the sake of the discussion, when talking about homeowners policies we will center on the HO 00 06 Unit-Owners Form. However coverage is available in the homeowners and tenants forms as well. Loss assessment coverage is built into the Homeowners – Unit-Owners Form HO 00 06 as an additional coverage up to a limit of $1,000; however a higher limit can be purchased and endorsed onto the policy via endorsement HO 04 35 Supplemental Loss Assessment.