When you are the owner of a shared property, like a unit in a condo or townhouse, sometimes the responsibility of fixing the damage to that shared property is split between all the unit owners. Subsequently, all owners must divide the cost of repairing these shared damages equally. Still following me? That is where a “loss assessment” report comes in. There are a lot of fingers in the pie, and the responsibility must be shared equally between all the responsible owners.
What are ‘Loss Assessments” Used For?
Not all damage to a shared property is the same. Loss assessments are usually only needed when the damages affect all owners. When all or none of the owners are specifically responsible, the cost of the repairs and remediation need to be shared by everyone.
For example, if the garage door in the building that everyone uses stops working for no apparent reason, no specific individual is responsible for the damage. That means all owners must share the cost of repairing the garage door. Another example of when the building may require a loss assessment is if the elevator fails, with no one specifically at fault. In such a case, it may be up to all owners to share the cost of repairing or replacing the elevator.
Loss assessments may also be required if there is an injury in a shared building area, of which all property owners would share the liability of the injury.
What About The Building’s Insurance?
The building “group” or Strata council probably has its own building condo insurance that could help cover these costs, but using the insurance deductible isn’t always the most economical choice. Essentially, the strata group could opt out of the building’s insurance policy, save the deductible (as well as increased premiums for their claim), and instead share the costs equally. This is all part of the overall loss assessment.
Is Someone Specifically At Fault?
If a specific unit owner accidentally drives into the garage door, they are at fault and will be responsible for the repairs instead of all the owners. The same goes for damages from a specific unit owner’s apartment, for example, if a leak comes from a unit that causes damage to another unit or the building. It will be the responsibility of that unit owner at fault (and their insurance) to cover those damages.
What Details Do A Loss Assessment Include, and Who Produces It?
A loss assessment will determine the actual damages that need to be addressed, options to address it, the total amount of money that is required to repair or replace what was damaged, as well as how the cost will be split up between all of the shared owners (if the building’s insurance is not used). The building’s internal group or Strata council creates the loss assessment. A general meeting is often required to vote the loss assessment into approval.
Loss Assessment Coverage Insurance
A unit owner in a condo building should have sufficient insurance to cover any damages or liability from their unit. However, extra specific loss assessment coverage is usually needed as an add-on if the owner wants to be covered for shared damage expenses and liability. That is where loss assessment coverage can be a lifesaver! Contact us to learn more and to get a FREE quote on loss assessment coverage for your building/unit today! We’d be happy to help answer any questions you may have.
If you live in Alberta or British Columbia and are looking for Home Insurance, we are here to answer any questions you may have about our range of home insurance products and services. Contact our team at 1.844.544.4663 and see what makes us Harbord – The Home Insurance People™!