If there is one coverage that consistently catches Florida condo owners off guard, it’s Loss Assessment Coverage—a core component of your HO-6 condo insurance policy and one of the most important financial safeguards you can carry in the state of Florida.

Every year, Florida condo associations issue millions of dollars in unexpected assessments for building repairs, hurricane deductibles, legal expenses, and damage to common areas. These assessments are divided among all unit owners, and depending on the size of the building and the severity of the loss, your share can range from a few thousand dollars to well over $50,000.

The unfortunate reality is that most condo owners don’t understand loss assessments until they’re facing one—and by then, it’s often too late.

In this third installment of the Florida Condo Insurance Education Series, we take a deep dive into Loss Assessment Coverage: what it is, why it’s critical for every condo owner in Florida, and how you can ensure you’re not caught unprepared when your association issues its next assessment.

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What Exactly Is a Loss Assessment?

A loss assessment is a financial charge issued by your condo association to cover expenses that exceed what the association’s master insurance policy pays for—or to pay for losses not covered at all.

Loss assessments can be triggered by:

• Storm damage
• Fire or smoke damage
• Flooding to common areas
• Large water losses
• Lawsuits against the association
• Damages to amenities (pool area, clubhouse, fitness center)
• Roof replacements or structural issues
• Elevator or plumbing system failures
• Major repairs identified during structural evaluations
• Shortfalls in the association’s reserve funds
• Rising property insurance deductibles

Your association provides the master policy for the building, but the master policy has deductibles, exclusions, and limits. Whenever the master policy doesn’t provide enough coverage, the CONDO OWNERS are billed for the remaining amount.

If you don’t have Loss Assessment Coverage on your HO-6 policy—or if you don’t have enough of it—you are responsible for paying your share out-of-pocket.

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Why Loss Assessments Are More Common in Florida Than Other States

Florida condo owners face a perfect storm of risk factors:

1. Hurricanes and Windstorms

Florida is the most hurricane-prone state in the U.S., and master policies often carry massive hurricane deductibles—commonly 2% to 5% of the building’s value. For mid-size and large buildings, this deductible can be several million dollars.

2. Aging Buildings

Many Florida condos were built decades ago and are now facing expensive repairs, plumbing issues, concrete restoration, and roof replacements.

3. Structural Integrity Rules (Post-Surfside)

The collapse of the Champlain Towers South in Surfside changed everything. Florida enacted strict new structural inspection requirements, often revealing years of deferred maintenance—and resulting in large special assessments.

4. Rising Insurance Premiums

Association master policies have increased dramatically in cost since 2020. Many associations struggle to keep up, especially if they have inadequate reserves.

5. Legal Claims and Liability Issues

Slip-and-fall lawsuits, pool injuries, damage caused by contractors, and other liability claims can lead to assessments if master policy limits are reached.

This combination makes Loss Assessment Coverage one of the most valuable forms of protection a condo owner can carry in Florida.

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Real Examples of Loss Assessments in Florida

Loss assessments are not hypothetical—they happen every day. Here are common real-world examples:

Example 1: Hurricane Deductible Assessment ($12,000 per unit)

A coastal building sustains $6 million in damage during a hurricane.
The master policy has a 5% hurricane deductible equal to $2.5 million.
The deductible is divided among 210 unit owners.

Owners receive a bill for $12,000 each.

Without Loss Assessment Coverage, the entire amount must be paid out-of-pocket.

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Example 2: Roof Replacement Shortfall ($7,500 per unit)

A building’s roof needs replacement due to storm damage and age.
Insurance covers part of it, but the association’s reserves are underfunded.

Owners are assessed $7,500 per unit.

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Example 3: Lawsuit Settlement ($18,000 per unit)

A visitor is injured on association property.
The association is found liable, but the claim exceeds liability limits.

The excess amount is divided among all owners.

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Example 4: Structural Repairs and Safety Upgrades ($50,000+ per unit)

Following new Florida safety inspections, major structural issues are identified.
Insurance covers nothing because the damage is gradual wear, not a sudden event.

Owners receive assessments ranging from $25,000 to $100,000 depending on unit size.

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What Loss Assessment Coverage Actually Pays For

Loss Assessment Coverage under an HO-6 policy typically helps cover:

• Your share of a deductible from the master insurance policy
• Damage to common elements (pool, clubhouse, parking garage, lobby)
• Damage from windstorms, hurricanes, or fire
• Certain liability assessments
• Occasionally, damage to limited common elements (balconies, patios)

It is important to understand that the coverage applies only when the cause of loss is something covered under your HO-6 policy.

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What Loss Assessment Coverage Does NOT Cover

Just as important as what it covers is what it doesn’t.

Loss Assessment Coverage will not pay for:

• Routine maintenance
• Wear and tear
• Neglected repairs
• Structural issues due to age
• Construction defects
• Flood assessments unless paired with the right flood policy
• Assessments for improvements or upgrades (like new landscaping)
• Fines or penalties issued by the association

This is where many unit owners get confused. The assessment must be connected to a covered cause of loss under the HO-6 policy.

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The Master Policy Deductible Problem: A Huge Risk for Florida Condo Owners

One of the biggest—but least understood—triggers for assessments in Florida is the master policy deductible, especially for hurricanes.

Example:

A building insured for $40 million with a 5% hurricane deductible has a $2 million deductible.

If a storm causes $3 million in damage:

• The master policy pays $1 million
• Owners are collectively responsible for $2 million

When divided among all owners, individual assessments are common:

• $5,000
• $12,000
• $20,000 or more

Your HO-6 Loss Assessment Coverage can pay these amounts up to your policy limit—but only if you’ve purchased enough coverage.

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How Much Loss Assessment Coverage Should a Florida Condo Owner Carry?

While every unit is different, the typical Florida condo owner needs more coverage than they think.

The Default Limit Is Usually Too Low

Most basic HO-6 policies include $1,000 to $5,000 of loss assessment coverage by default.

This is nowhere near enough for Florida.

Best Practices for Florida Condo Owners

We recommend:

• $25,000 minimum
• $50,000 for most Florida condo owners
• $100,000 for coastal, high-value, or high-rise condos

These limits are extremely affordable and provide essential protection against large assessments.

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Is Loss Assessment Coverage Expensive?

Compared to the potential out-of-pocket exposure, Loss Assessment Coverage is one of the best values in all of personal insurance.

Additional coverage limits (like $50,000 or $100,000) typically cost a fraction of what most people expect—often only a small increase in annual premium.

In the Florida market, where assessment risks are high, this is one of the most cost-effective ways to prevent large unexpected financial burdens.

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Common Misconceptions About Loss Assessment Coverage

We frequently hear Florida condo owners express confusion about assessments. Here are the most common myths:

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Myth #1: “My master policy already covers everything.”

False.
Master policies have deductibles, exclusions, and limitations. Losses often exceed the coverage.

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Myth #2: “The association has reserves, so assessments won’t happen.”

Not true.
Reserves often cover routine maintenance—not catastrophic losses.

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Myth #3: “My HO-6 policy doesn’t need to match the master policy deductible.”

Incorrect.
If the master policy has a massive deductible, you need Loss Assessment Coverage to match your share.

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Myth #4: “Flood assessments don’t happen.”

They do—and if your building has NFIP flood limitations, assessments may follow.

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Myth #5: “I live inland, so assessments don’t apply to me.”

Assessments happen due to:

• Fire
• Plumbing failures
• Water damage
• Liability lawsuits
• Structural repairs

Not just hurricanes.

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How to Make Sure You Have the Right Loss Assessment Coverage

To be fully protected, every Florida condo owner should:

1. Review the condo governing documents
   Determine what the association insures and what you must insure.
2. Ask the association about the master policy deductible
   Especially for wind/hurricane losses.
3. Check the master policy limits
   Understand how large losses will affect unit owners.
4. Review your HO-6 policy with an expert
   Ensure coverage limits are adequate and match your building risk.
5. Confirm you have enough protection for special assessments
   Most owners need more than the default coverage.

At Florida Risk Partners, we help condo owners understand the exact level of coverage they need based on their building’s master policy and the unique risks of their location.

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Why Loss Assessment Coverage Is Non-Negotiable in Florida

Loss assessments are becoming increasingly common—more so now than at any time in Florida’s history. With rising insurance costs, stricter building inspections, hurricane exposures, and aging infrastructure, associations often rely on assessments to cover unexpected or uncovered costs.

Without sufficient Loss Assessment Coverage, an owner may suddenly be responsible for:

• Thousands in repairs
• Tens of thousands in hurricane-related deductibles
• Legal expenses
• Structural assessment requirements
• Damage to amenities
• Shortfalls in reserve funds

The right HO-6 policy helps protect your financial stability when the association assesses additional charges.

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Final Thoughts: Assessments Are Inevitable—Protection Is Optional

A loss assessment can arrive without warning—and once it does, you cannot purchase coverage retroactively. Your HO-6 Loss Assessment Coverage must be in place before the event occurs.

In Florida’s current condo climate, where assessments continue to rise and storm risks remain high, carrying the right amount of Loss Assessment Coverage is one of the smartest investments you can make.

Next week in the series, we explore another major pain point for condo owners: water damage, the most common—and often the most complicated—type of claim in Florida condominiums.