My co-op board is going to assess shareholders to cover coronavirus-related expenses and the maintenance delinquencies of residents who have lost their jobs as a result of the crisis. Shouldn't my individual apartment insurance reimburse me for the assessment since it's disaster related?
Unfortunately, it's unlikely that your insurance will cover this particular kind of assessment, our experts say.
Your insurance policy's loss assessment coverage protects you from unexpected expenses resulting from damage to the building, The Balance explains. However, this doesn't include claims related to the pandemic or resulting job loss.
"The loss assessment coverage under your individual co-op or condo insurance policy will typically only pick up charges exceeding the building's master coverage for claims that would be covered under your own policy—fire, water damage from broken pipes, accidents due to negligence," explains Jeffrey Schneider of Gotham Brokerage (a Brick sponsor).
"Covid claims or income shortfall claims like this would not be picked up as a peril under your individual policy, and are unlikely to be covered if presented as a loss assessment claim under your individual policy," he says.
Another issue is that your insurance covers losses that affect you as the shareholder, rather than ones that impact the co-op overall. Assessment fees generally support projects the co-op board finds necessary to make improvements to the building; in this case, it's to make up for lost funds as a result of the pandemic and unemployment.
"An assessment imposed by the co-op board to pay for losses suffered by the co-op arising from the pandemic would typically not be covered by a shareholder’s apartment insurance, since the assessment is contract-based between the co-op and the shareholder, and not casualty-based," says Aaron Shmulewitz, an attorney with Belkin Burden Wenig & Goldman.
That said, the coronavirus crisis has brought New Yorkers into uncharted territory, so it may not hurt to reach out to your insurance provider anyway.
"There are gray areas surrounding the Covid situation, so it still might make sense to file the claim," Schneider notes.
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