Red Flag: Clients in Home or Condo Associations
It has been reported that about one is six American households belong to some form of home or condo association. Here in the Seattle area I'm betting that ratio is higher. What many property owners fail to understand is that most associations have bylaws that allow for association losses to be assessed to all owners, or even one owner!
Most home and condo insurance policies automatically provide some level of coverage for certain assessments levied against an insured, but it's usually limited to just $1,000. In addition, the intrepretation of what is covered under the loss assessment provision of any particular policy can be extremely complex (specific claim horror stories can be provided upon request).
Fortunately, most insurance companies provide optional increases to the limits provided for loss assessments, but your client needs to ask for them. If you have clients that live in a development or unit with an association be sure that they take steps to understand the scope of their exposure to loss assessments and the options for getting loss assessments covered by their home/condo insurance policy.
Mechelsen, Inc. Darren McGraw, MBA, CIC mechelseninc.com
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