Buying a condominium or townhome often means less maintenance, shared amenities, and a homeowners association (HOA) that helps maintain the property. While that can be a great lifestyle choice, it also creates a unique insurance exposure that many owners don't realize exists.

It's called Loss Assessment Coverage, and it could save you thousands of dollars.

At State of Hockey Insurance, we frequently review condo and townhome policies where this important coverage is either missing or far too low.

When you own a condo or townhome, you typically own your individual unit while sharing ownership of common areas such as:

• Roofs
• Exterior walls
• Clubhouses
• Hallways
• Parking lots
• Swimming pools
• Fitness centers
• Elevators
• Landscaping
• Private roads

These common areas are generally insured by the homeowners association's master insurance policy. But what happens if there's a major claim that exceeds the HOA's insurance limits or falls within a large deductible?

The HOA may legally assess each owner for their share of those costs. That's where Loss Assessment Coverage can help.

Imagine a severe hailstorm damages every roof in your townhome community. The HOA files a claim through its master insurance policy — but the master policy carries a $50,000 wind/hail deductible.

Instead of paying the entire deductible, the HOA divides that cost among the homeowners:

• 50 units = $1,000 per owner
• 10 units = $5,000 per owner

Without adequate Loss Assessment Coverage, that bill comes directly out of your pocket.

Loss assessments aren't limited to roof claims. Depending on your association's governing documents and your insurance policy, assessments may arise from:

• Fire damage
• Storm damage
• Liability lawsuits
• Damage to shared buildings
• Injuries occurring in common areas
• Wind or hail deductibles
• Certain water losses

Many condo owners purchase an HO-6 policy because their lender requires insurance. Unfortunately, they often focus only on the dwelling and personal property limits. Loss Assessment Coverage may be included automatically — but sometimes only at a relatively low limit.

For some associations, increasing that limit can provide valuable additional protection for a modest increase in premium.

Many associations have significantly increased their property deductibles in recent years due to rising insurance costs. It's not uncommon to see deductibles of $10,000, $25,000, $50,000, or even $100,000 or more. If your association assesses those costs back to owners, having adequate Loss Assessment Coverage becomes even more important.

A complete insurance review should include:

• Your HO-6 policy
• Your HOA's master insurance policy
• Your association bylaws (when available)
• Your personal liability limits
• Your Loss Assessment Coverage limit

Understanding how these pieces fit together can help prevent costly surprises after a claim.

At State of Hockey Insurance, we help condo owners, townhome owners, homeowners, landlords, contractors, homeowners associations, and businesses protect what matters most. Our goal is to explain your coverage in plain English so you understand what you're buying before you ever need to file a claim.

Visit www.StateofHockeyInsurance.com or call 612-361-7283 to schedule your insurance review today.