If you attend or follow your HOA meetings, you’re probably well-aware of the issues facing the HOA insurance market. Some of the main issues affecting unit owners are the rising wind and hail deductibles. Many large HOAs now have wind and hail deductibles in the millions of dollars. This means that in recent years when HOA buildings suffer hail damage, they must assess all unit owners to cover the deductible. This expense could be covered by your unit owners policy if you have loss assessment coverage of adequate limits 1.
We are seeing more and more limitations and exclusions popping up when it comes to loss assessment coverage due to the spike in claims in recent years. Some things to be aware of are that some policies will limit loss assessment coverage to a small amount (such as $3,000). Other companies we’ve seen will exclude coverage if the loss is to cover the HOA deductible. Other carriers are changing the language of the policy to define the date of loss as the date of the storm, as opposed to what has historically been the date of loss, the date of the assessment 1.
In 2024, the Colorado legislature authorized a study to analyze the HOA and Lodging insurance market in Colorado. The results of that study were recently released and are available in the link below
12.2.25 Market Study Stakeholder Meeting Recommendations – Google Drive
As always, we’d be happy to answer any questions you have about your loss assessment coverage. 303-922-1002.
