Does my apartment insurance cover a special assessment by my co-op board? And does insurance cover certain types of assessments but not others?
Your insurance will help to cover assessments made under specific circumstances, our experts say.
Co-op and condo boards may periodically impose assessments when taking on a project to improve or repair some aspect of the building. For co-ops faced with sudden, significant expenditures that cannot be fully covered by the building's reserve funds, co-op shareholders will be hit with a temporary increase in their monthly maintenance payments, determined based on their ownership interest.
Depending on the nature of the assessment, your insurance may cover your expenses.
"Most condo or co-op policies contain loss-assessment coverage, with limits that can vary from $1,000 to $50,000 or more," says Jeffrey Schneider, president of Gotham Brokerage (a Brick sponsor). "This covers you if you are billed for your pro rata share of an assessment for an incident that exceeds the building's master policy insurance coverage. The claim has to involve a peril that would be covered under your policy, like a fire or water damage from a broken pipe."
But if the assessment is for a project that is for an aesthetic improvement, rather than for repairing damage to the building, you're out of luck.
"Assessments for maintenance or upgrades would not be covered," Schneider says.
Generally, a board has the right to impose an assessment to pay for necessary building expenses. However, if there is strong opposition to the project and it is not considered essential, you and your neighbors could get together and call for a special meeting to ask the board to explain why they've deemed this assessment necessary, and propose alternatives or limit the project if it seems appropriate.
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