$100,000 deductible depends entirely on ….

$100,000 deductible depends entirely on the specific Mutual’s governing documents.

Some Mutuals may distribute the deductible among shareholders, while others may apply alternate methods. Shareholders are encouraged to review their Mutual’s policies to understand how these situations are handled.

Historical Practice: When Individuals Have Paid the Full Deductible GRF has historically assessed the full deductible to an individual shareholder only when that person was solely negligent in causing the loss.

While situations vary, the guiding principle is clear: deductible responsibility follows negligence.

Understanding Loss Assessment Coverage With the rising deductible, many shareholders have asked about loss assessment coverage, a component commonly found in HO 6 condominium insurance policies.

Loss assessment coverage helps protect individual unit owners from unexpected financial obligations when their association (or Mutual) issues a special assessment for a covered loss.

This type of coverage can apply when:

• A major property loss leaves the Mutual responsible for a large deductible

• Damage affects shared structures or common areas

• A Mutual’s insurance is insufficient to cover a claim

• A shareholder is assessed a portion—or all—of an insurance deductible Loss assessment coverage is designed to help pay the amount the Mutual charges the shareholder, depending on the situation and policy terms. This is separate from Personal Liability coverage which is designed to respond when the shareholder is negligent in causing a loss.

Does GRF Recommend a Minimum Coverage Amount?

GRF does not recommend specific limits or types of coverage.

Instead, shareholders are advised to: review their occupancy agreement; examine their Mutual’s governing documents; and consult a licensed homeowners insurance agent.

These steps help determine the appropriate amount of loss assessment, liability, and property coverage based on individual risk tolerance and the Mutual’s requirements.

Please note that the information provided herein is for discussion purposes only and is provided by way of general information. Coverage for any particular matter will depend upon the specifics of the policy, the details of the claim, and the application of insurance law, which may be less than certain. DLD does not undertake to provide any opinion as to how an insurance company, court or arbitrator may respond to a particular claim.