Homeowners FAQs

When can a Georgia condo association assess unit owners for a loss?

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Quick answer: When repair costs, a liability judgment, or a passed-through deductible exceed what the HOA master policy pays, owners can be assessed.

When can a Georgia condo association assess unit owners for a loss?

A Georgia condo association can bill unit owners for a special assessment whenever a covered loss costs more than the HOA's master insurance policy pays. That happens in a few common situations: repair costs exceed the master policy's building limit, a liability judgment exceeds the master policy's liability limit, or the association passes through its own master policy deductible to owners. Each owner typically owes a pro-rata share of the shortfall, set by ownership percentage or the association's bylaws, regardless of whether they were personally involved in the loss.

Under Georgia's Condominium Act, the association must insure the building and common elements (O.C.G.A. Sec. 44-3-107), and it may allocate a share of the master policy's deductible to affected unit owners, up to $5,000 per owner per casualty, plus any restoration cost above the insurance proceeds (O.C.G.A. Sec. 44-3-94), through the assessment power the Act grants (O.C.G.A. Sec. 44-3-80). Both the deductible allocation and the shortfall rule are default provisions - they apply unless the building's own declaration or bylaws say otherwise, so the specific outcome for any one building depends on its governing documents.

  • A fire or wind event causes damage that exceeds the master policy limit
  • A liability claim, such as a guest injured in the pool, produces a judgment larger than the master policy's liability limit
  • The HOA's master policy deductible is passed through to owners
  • A special assessment arises from a covered peril that the master policy excludes at the building level

For example, a liability judgment following an injury at the building's pool exceeds the HOA's master policy liability limit by $60,000. The association passes that gap to all 40 unit owners as a special assessment of $1,500 each. An owner carrying $5,000 in loss assessment coverage on their HO-6 policy files a claim and the policy pays the full assessment.

How does the HOA master policy create an assessment gap?

Your association carries a master policy that covers the building structure up to its policy limit, but it also carries a deductible, sometimes $10,000, sometimes $100,000 or more, depending on the association's coverage choices. When a covered loss, fire, storm, or liability judgment, produces a bill the master policy cannot fully absorb, the association can divide the remaining cost among all unit owners by issuing a special assessment. Loss assessment coverage pays your share, and it sits inside your individual condo policy (HO-6), not in the master policy the HOA carries on the building.

For example, a fire damages shared hallways and the roof of a 40-unit building. Repair costs total $180,000, but the master policy covers only $130,000. The $50,000 gap is split evenly. Each of the 40 owners receives a $1,250 assessment. An owner carrying $5,000 in loss assessment coverage files a claim, and the coverage pays the $1,250 bill. Without it, that amount comes out of pocket.

What coverage limits are typical for loss assessment, and are they enough?

Loss assessment coverage responds to that bill up to the policy limit on your HO-6. Standard limits are $1,000 or $2,000, but those amounts often fall short of real assessments in large or high-rise buildings. Many Georgia condo owners raise the limit to $10,000 or higher for a modest additional premium.

What should Georgia condo owners check about their loss assessment coverage?

One detail matters for Georgia owners: loss assessment coverage on a standard HO-6 responds only to assessments arising from a peril that your own policy covers. If the master policy has a separate windstorm deductible and the HOA passes it through, confirm that wind is a covered peril on your HO-6 before assuming the coverage applies. Because a condo policy and the broader protections built into homeowners insurance handle perils differently, the right limit depends on your building's master policy deductible, the number of units sharing exposure, and the HOA's financial reserves. A licensed advisor at a coverage review can run through those numbers and identify whether your current limit matches your actual exposure. Schedule a free coverage review to get a limit recommendation specific to your building and association.