Loss Assessment Coverage
What this clause says
This policy is endorsed to cover the insured unit owner for a special assessment levied by the Association as a result of a covered property or liability loss to the common elements, subject to the loss assessment limit stated in the declarations and the terms of the underlying Association coverage.
What this means in plain English
Loss assessment coverage sits on the unit owner HO-6 policy, not the master policy, and pays a unit owner for a special assessment the association levies after a covered loss to the common elements, including the master policy deductible when it is passed through to owners. It is a small endorsement that closes the gap between what the master policy pays and what individual owners are assessed. Limits commonly run in the $50,000 to $100,000 range, but a high master-policy deductible can outrun a thin loss assessment limit.
What it means for an HOA board
A board cannot buy this coverage for owners, but it should tell them to carry it, because the association budget is exactly what a shortfall lands on. When the master policy runs a high wind or all-perils deductible, a single covered loss can generate a per-unit special assessment that exceeds a low loss assessment limit, and the association absorbs the uncollectible remainder. Communicate the master deductible figure to owners so they can size an HO-6 loss assessment limit that actually covers their share.
Program notes
This one is an owner-education item as much as a coverage item. The most useful thing a board can publish is the master-policy deductible in dollars so owners can size their own endorsement.
How this evaluates
The Policy Checker applies these rules in order; the first match wins.
loss assessment limit is at least $50K -> Compliant: A loss assessment limit in the $50,000 to $100,000 range covers a typical pass-through special assessment. loss assessment limit is at least $1 -> Borderline: Loss assessment coverage is present but may be thin relative to the master-policy deductible. Compare it to the per-unit share of that deductible.
See this in your policy
Check this clause against your master policy.
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