Loss assessment coverage is part of which type of insurance policy?

Loss assessment coverage is a feature found specifically in homeowners insurance policies. This type of coverage is designed to protect homeowners who belong to a homeowners association (HOA). In situations where the HOA imposes an assessment due to shared loss or damage (for example, from natural disasters or other incidents affecting common areas), loss assessment coverage helps to cover the insured's share of that assessment, up to a certain limit.

In the context of homeowners insurance, this coverage is particularly valuable for those living in community settings where collective responsibility for property damage exists. While other types of insurance, such as auto, health, and life insurance, serve different purposes and cover different risks, they do not include loss assessment coverage. This specificity highlights the role of homeowners insurance in addressing situations that arise within community living contexts, making it an essential component for policyholders in those situations.