Maryland Property and Casualty Insurance Practice Test

Loss assessment coverage protects you when your homeowners association bills members to cover a loss to shared, common-area property. If damage to the HOA’s common areas (like a pool, clubhouse, or sidewalks) is not fully paid by the HOA’s own insurance and deductible, they may issue assessments to each member. This coverage pays those assessments up to the policy limit, making you responsible for a smaller portion of the shared loss. The association is the entity involved because the charges arise from shared property, not from your private property, loan fees, or local taxes.