By Ella Washington, Ella Washington Insurance Agency
With so much uncertainty in our world today, the one thing we can count on is hail in Colorado. In fact, since 2017, Colorado’s insurance carriers have paid about several billions of dollars in hailstorms alone. As hail and windstorms continue to be problem for insurance carriers in Colorado, we are finding that the coverage on your personal Condominium or Townhome insurance policy could be affected.
Separate wind or hail deductible percentages are nothing new in Colorado: this mandated deductible change has been around for over ten (10) years. Because of this, Homeowners Associations are experiencing Special Assessments for claims resulting from their HOA’s wind or hail deductible now more than ever. Homeowners that live in a planned unit development have always had the option to purchase Loss Assessment coverage under their personal home policy. These policies are known as HO6 policies. Loss Assessment is a rider on your HO6 home policy that you can purchase to help pay for a special assessment from a covered insurance loss. In the past, we have always suggested working with your personal home insurance agent to get Loss Assessment coverage to help pay for these special assessments. But it’s not that easy anymore.
Because of the severity of wind and hail claims in Colorado, many of the insurance carriers are now changing their Loss Assessment coverage. Some home insurance carriers are now excluding an HOA’s wind or hail deductible under their Loss Assessment coverage. Some are only offering a maximum of $1,000 in Loss Assessment coverage for any claim resulting from an HOA’s wind/or hail special assessment (regardless of the policy limits that were purchased). Other carriers will not allow a policyholder to add this coverage or increase this coverage throughout the year but rather only at the policy renewal date.
If your insurance carrier does offer Loss Assessment coverage for your HOA’s wind or hail special assessment, we recommend for policyholders to reach out to their insurance agents, each year, to confirm policy limits or exclusions on this endorsement. Insurance carriers do have to inform their policyholders, in writing, of any coverage changes or changes to the contractual language of a policy. I find it’s best to have these conversations with your insurance agent as well as reading your policy renewal coverage.
There are still plenty of quality HO6 insurance policies that offer the coverage that homeowner’s need for their Special Assessments. We encourage consumers to do their due diligence and find those insurance carriers so they can have their Special Assessment claim covered before the next storm occurs.
Ella Washington is a 20-year veteran in the HOA Insurance industry. She is named one of the top writers in the nation for homeowners’ association insurance. Being an advocate to her Association Board Members and Managers is always her top priority and is the foundation of her success.