Here's Why You Need to Care About Loss Assessments

Loss assessments are a concern unique to condo owners. Learn about loss assessments and condo insurance here.
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Loss assessments are part of life for condo owners in Canada. A loss assessment happens when condo owners need to pay for damage to their condo building. Condo ownership means owning one’s individual unit outright, but also owning a share of the building’s common property - stuff like elevators, hallways, pools, or fitness centres.
Condo buildings have a master insurance policy, which insures the building itself. That includes the individual units, but only to the degree that they were originally constructed. Individual condo owners also need individual condo owner policies. These cover improvements to the unit, the owner’s possessions and (the important part, here): loss assessments.
If a condo building gets damaged, they can make a claim against the master policy. However, many condo master policies have deductibles of $100,000 or more. That amount will be billed to the building’s owners, usually in proportion to their share of ownership. That’s a loss assessment. They’re responsible for paying it, unless they have loss assessment coverage on their individual condo owner policy.
Loss assessments are different from special assessments. Special assessments are charged to the building’s owners to cover things that aren’t losses per se, like if they need to re-pave the parking lot or replace aging plumbing. These types of projects aren’t covered by insurance, so if the condo corporation’s reserve fund doesn’t have enough money in it, the condo board can issue a special assessment to cover the costs.
To decide how much loss assessment coverage you need, you’ll need to be familiar with the building’s master insurance policy as well as its bylaws - the bylaws that state (among other things) how and when owners can be assessed losses. When you buy condo insurance, your provider might be able to help you read through these documents and determine the right coverage (especially if you get condo insurance from Square One).
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View the complete article ► www.squareone.ca/resource-cen...
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00:00 Intro
00:34 What is a loss assessment?
02:36 Loss assessment example
03:57 Special assessments
04:54 Insurance for loss assessments
05:28 How much loss assessment coverage do I need?
#CondoInsurance #CondoLossAssessment #LossAssessmentCoverage #LossAssessmentExplained #LossAssessmentInsurance