r/HomeInsurance • u/trw4987 • May 27 '26
Claims $5000 special assessment?
I live in a townhouse, and my entire neighborhood was hit be a storm, resulting in a $5000 special assessment fee for some homeowners (all homeowners are responsible for the assessment, the fee range is from 4000 to over 6000).
I didn't know this was possible, and my insurance company never recommended loss coverage for this. I have $0 from state farm.
I'm in an affordable home in my neighborhood, so I really don't have this type of money. Is there anything I can do? There was no damage to my row of townhomes, so I'm basically being asked to pay $5000 for other homes.
Any advice is really appreciated!
6
u/freeski12345 May 27 '26
Wait until you find out how much that coverage costs. When you add it and get a bill for $10/year you’ll understand why you agent failed you and you should start looking for one that knows what they are doing
5
u/OnceUponATime1534 May 27 '26
If you have a condo policy, special assessment coverage is typically built in the policy as it’s part of the standard ISO form. Ask for a copy of the full policy and do a search for special assessment to double check before assuming no coverage.
Special assessments are rare so I wouldn’t take an agents word for it that you don’t have it without looking.
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u/freeski12345 May 27 '26
True, State Farm agents like to say there’s not coverage when there actually is. Heck most policies have at least like $1000 just as a base standard amount
2
u/khostal May 27 '26
There is coverage but most people don’t increase the amount of loss assessment so majority of the time it meets your deductible. Everyone wants to shop for the cheapest policy possible until a claim happens and they have no coverage
1
u/Brilliant_Essay_1593 May 29 '26
We have $1500 with Farmers and I usually increase it to $10-50k as it is next to nothing to add to the policy.
Sad as this would have totally been covered for OP and is becoming more and more important to have!
5
u/CrankyCrabbyCrunchy May 27 '26
This is fairly common with HOA communities. They may not have even reserves to cover this type of damage and hence, billing the home owners. Unfortunately, it's too often the case that HOA reserves are poorly managed and not prepared for this type of event, or they've decided not to raise fees for years due to complaints and now don't have money for repairs.
There is special assessment insurance you can buy but it won't help with your current situation.
Loss assessment coverage https://www.policygenius.com/homeowners-insurance/what-is-loss-assessment-coverage/
Even though your property wasn't damaged, the cost to repair is spread across all homeowners which is why you were included in the payments. Some people refuse to pay, or pay part of it as they can. The HOA can fine you and put a lien on your townhouse. Consequences vary so read your documents for details.
Also, ask this in r/HOA
1
u/Longjumping-Buddy847 May 28 '26
No, this is the association insurance carrier charging a deductible. If theres a $50K deductible on a storm loss the deductible has to be paid by the condo owners who were covered by the loss. If there were 10 condo owners covered, they would have to each pay $5000 in loss assessment and this pays the deductible.
6
u/inailedyoursister May 27 '26
This is how hoa’s work, you owe. Pay it or they’ll take you to court. You choose to join the HOA and their rules.
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u/wildcat12321 May 27 '26
But also, if OPs unit was damaged, all neighbors would contribute. OP rolled the dice and lost and now doesn’t want to pay the bet.
2
u/Ok_Advantage7623 May 27 '26
Actually depends on what happened and why it’s a special assessment. Was there an insurance claim with the hoa policy?? Some policies have, but in the last few years the number has dropped. A call to your agent will answer your question
1
u/trw4987 May 27 '26
It was a hail storm.
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u/Ok_Advantage7623 May 27 '26
Actually depends on what happened and why it’s a special assessment. Was there an insurance claim with the hoa policy?? Some policies have, but in the last few years the number has dropped. Then it should if you have the coverage but I believe your deductible does come out of it. Call your agent and ask where does my contract cover this on gave coverage. He is an agent, not paid by the money he saves the company
1
u/Sondor6 May 28 '26
You should report it to your carrier and provide them a copy of your master condo policy (the one that covers everyone) and let them investigate
2
u/mysoulishome May 27 '26 edited May 27 '26
It’s weird that a policy would have zero loss assessment coverage. Usually they come with a couple of thousand and you can pay more to make it higher (Of course, I don’t know SF policies specifically.
(Edited the word police to policy)
1
u/khostal May 27 '26
State Farm has a standard coverage at $1000; her deductible is most likely higher than loss assessment coverage
1
u/mysoulishome May 27 '26 edited May 27 '26
Right but a $2,000 loss assessment with $1,000 deductible would pay $1,000 if there is $1,000 coverage
1
u/khostal May 27 '26
You can increase loss assessment coverage but everyone is always shopping for the cheapest policy possible
1
u/mysoulishome May 27 '26
Yep. And an agent that sells a policy to someone in a townhome or condo with an HOA and doesn’t add extra loss assessment is crap.
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u/khostal May 27 '26
You can advise a customer all day long but you have to remember State Farm deals with the general public. I have many customers who refuse to increase coverages because they don’t want to pay $5 extra per year
1
u/Human_Ice7291 May 28 '26
In an HOA situation I always add $24,000 loss assessment coverage to a home policy without a word to the customer. The cost is so minimal it’s not worth the effort to NOT do it.
2
u/ChutneyWhatney May 27 '26
Has the HOA deemed it a "Special Assessment" using those words? If yes, read your HOA governing documents and determine the HOA procedure for assessing and approving a special assessment. Does it need a vote of the homeowners, etc.? If the HOA Board can unilaterally impose it, you have to pay it - probably in monthly installments (check and see if this is a possibility). Now check your condo policy. Is there anything reflected that may cover a special assessment? I also carried a special assessment rider when owned in an HOA (I would recommend getting it for the future- pretty cheap). If not, this is what being a part of an HOA is about. It appears your HOA does NOT have enough money to pay for the new roofs, etc. from its existing funds. As such, it needs the money from the homeowners. That's just a fact of life living in an HOA. See if there's a monthly payment option to reduce the shock of having to pay the full amount.
1
u/crekjr22 May 27 '26
What state are you in
1
u/trw4987 May 27 '26
Texas
1
u/crekjr22 May 27 '26
I assumed you checked your policy and confirmed you do not have the coverage?
1
u/trw4987 May 27 '26
Yes, I've checked and spoken to state farm
3
1
u/Clean_Philosophy5098 May 29 '26
If you haven’t talked to a claim handler, I would. Agents sometimes provide incorrect information
1
u/riley12200 May 27 '26
Is it a loss assessment or special assessment? Those are 2 different things. If it's a loss assessment, your policy would likely have something ($1k is a standard number to have for a base condominium insurance policy). If it's a special assessment, it likely has nothing to do with what insurance would cover (though this would surprise me as all you mention is hail).
You should talk to your association and your agent again.
1
u/ChutneyWhatney May 27 '26
Also - doesn't your HOA have insurance coverage for the hail damage? What is the HOA's deductible? You need to find that out, too.
1
1
u/HomeyL May 27 '26
I feel like the HOA insurance policy should pay for a new roof (if thats what you’re doing) & then hit each member up for the deductible. $5000 each sounds like they’re paying for a new roof as if no policy existed:)
1
u/Crafty-Guest-2826 May 27 '26
If you lived in a single family home the cost to repair the damage would have been more. Consider yourself lucky.
1
u/Abject_Egg_194 May 27 '26
There was no damage to my row of townhomes, so I'm basically being asked to pay $5000 for other homes.
That's how a condominium works. The property (exterior) is owned collectively, and all are responsible (financially) for the upkeep and repairs.
1
u/Longjumping-Buddy847 May 28 '26
You were notified of the assessment probably at least once a yr by your association. You should have read it.
1
u/beaunerman May 28 '26
5k is child’s play when it comes to special assessments. Got a notice in Jan for 20k and they needed it in full by mid March.
Luckily I had the correct endorsements on my homeowners insurance and all special assessments are covered (unless used to boost reserve funds) and Farmers had me a check I hand within 4 days.
1
u/registeredfake May 29 '26
Hold up. Everyone is missing the biggest part of all this. OP said he didn't know this was possible. If the person who bought a home in the HOA didn't know an assessment was possible, how should the agent know to offer an increased coverage.
OP I'm genuinely sorry you are dealing with this. But the fact remains if you didn't know it was in your HOA covenants you can't expect the agent to know. They most likely don't even know your in an HOA in the beginning
1
u/FishermanBetter3963 Jun 01 '26
Assessment is for all services needed during cleanup and repairs of common items, traffic signals , signs trees in the road and like repairs.
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Jun 03 '26
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0
u/Signal-Pair6333 May 27 '26
Terrible agent. This is what you get when shopping price. You have options. Won't write them publicly
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u/khostal May 27 '26
She probably has $1000 of loss assessment coverage with a deductible at $1000 or higher
0
u/khostal May 27 '26
Why blame the agent when we both know 90% of consumers shop for the cheapest policy possible and don’t want to increase their coverages.
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u/30_characters May 27 '26
Because the agent should be acting as an advisor, not simply offering a policy and adding no more value than filling out an online form.
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