What is a loss assessment fee?
By Bob Millaway, South Jersey Community Expert & REALTOR®
A loss assessment fee is a charge that condo or HOA owners may be required to pay when the association's insurance policy does not fully cover damage to common areas. For example, if a fire damages the clubhouse and the HOA's policy has a $50,000 deductible, each unit owner may be assessed a share. Standard homeowner's policies often include loss assessment coverage, typically $1,000 to $5,000. You can increase this coverage with an endorsement. Review your HOA's insurance and your personal policy to ensure you are protected.
Why It Matters
An unexpected loss assessment can cost thousands of dollars. Adequate coverage ensures you are not caught off guard by a special assessment after a common area loss.
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