What does "loss assessment" coverage in homeowners insurance provide?

Loss assessment coverage in homeowners insurance is designed to protect policyholders against costs that arise from assessments made by homeowners associations (HOAs) due to certain types of loss. When a significant loss occurs in a community, such as damage from a natural disaster, the HOA may levy assessments on all unit owners to cover the repair costs or other related expenses.

This type of coverage steps in to help offset the financial burden placed on a homeowner when they are liable for a portion of those assessments. For example, if a community pool or shared building is damaged and the HOA charges the homeowners to cover the repairs, loss assessment coverage can help pay that expense, reducing out-of-pocket costs for the homeowner.

The other options refer to different types of coverage: repairs from a fire are typically covered under dwelling coverage, personal property coverage addresses loss or damage to items inside the home, and liability coverage protects against claims made against the homeowner for injuries or damages sustained by others. While these are important components of homeowners insurance, they do not capture the specific purpose of loss assessment coverage.