Definition
Coverage on an owner's individual policy that helps pay special assessments the HOA levies after a covered loss.
Loss assessment coverage is an add-on to an individual owner's policy (such as an HO-6 condo policy) that helps pay special assessments the association charges owners following a covered loss — for example, when a claim exceeds the master policy or its deductible.
It protects owners from a sudden out-of-pocket assessment after a major event. Boards often encourage owners to carry it, since it reduces friction when the association must assess for an insured loss.