When you belong to a homeowner’s association where all members collectively own property and that property suffers damage, the homeowner’s association may issue a loss assessment on the members to pay for the damages. For example, what if the community clubhouse’s roof is damaged by hail and needs to be replaced? If for some reason, the homeowner’s association’s property insurance doesn’t pay, the homeowners association will assess each homeowner a portion of the repairs.
While you may think that this can only happen to condo owners, you are wrong. If you belong to a homeowner’s association that owns community property such as pools, clubhouses, storage buildings, sheds, golf carts, or any other type of property
If you have a standard homeowner’s policy, your insurance may cover this loss assessment if the damage was caused by a peril that your insurance would normally cover (less the deductible). For instance, since hail is a covered peril, the insurance company will pay your portion of the loss assessment up to the named limit (usually $1000). If the roof were simply old and you were assessed for repairs or replacement, your insurance won’t pay the loss assessment because standard maintenance and wear and tear are not covered under the policy.