Unfortunately, this loss assessment coverage doesn’t always cover all property loss assessments, as one condominium unit owner found out in the case of Grife v. Allstate Floridian Ins. Co. In Grife, Hurricane Wilma damaged the plaintiff’s condominium building. The association’s insurance policy covered the damage to the building, but there was a sizable deductible to the tune of over $800,000. The association passed the cost of the deductible on to each of the unit owners through a special assessment. Mr. Grife’s personal assessment was approximately $1,200. He filed a claim to cover this expense under his unit owner policy, but the claim was denied.

Mr. Grife sued the insurance company, but the lawsuit was dismissed early on when the court found that the loss assessment provision in his policy did not cover assessments based on an insurance deductible. The loss assessment provision of his policy included what the court called a “Master Deductible” clause. Specifically, the policy provided that, “Any reduction or elimination of payments for losses because of any deductible applying to the insurance coverage of the association of building owners collectively is not covered under this protection.” The court determined that this language limited loss assessment coverage to losses under the association master policy that exceeded the master policy’s coverage limits. Procedurally, the court granted the insurance company’s motion for judgment on the pleadings. Mr. Grife appealed, and the Eleventh Circuit Court of Appeals affirmed the lower court’s ruling.

While a “Master Deductible” clause was included in Mr. Grife’s unit owner policy, it may not be found in every condominium unit owner’s policy. Insurance agents should ascertain whether loss assessment coverage will apply under the specific circumstances of their insureds and the master policies that are inforce for their specific condominium association.

§627.714 Residential condominium unit owner coverage; loss assessment coverage required.—
(1) For policies issued or renewed on or after July 1, 2010, coverage under a unit owner’s residential property policy must include at least $2,000 in property loss assessment coverage for all assessments made as a result of the same direct loss to the property, regardless of the number of assessments, owned by all members of the association collectively if such loss is of the type of loss covered by the unit owner’s residential property insurance policy, to which a deductible of no more than $250 per direct property loss applies. If a deductible was or will be applied to other property loss sustained by the unit owner resulting from the same direct loss to the property, no deductible applies to the loss assessment coverage.

(2)  The maximum amount of any unit owner’s loss assessment coverage that can be assessed for any loss shall be an amount equal to that unit owner’s loss assessment coverage limit in effect 1 day before the date of the occurrence. Any changes to the limits of a unit owner’s coverage for loss assessments made on or after the day before the date of the occurrence are not applicable to such loss.

(3)  Regardless of the number of assessments, an insurer providing loss assessment coverage to a unit owner is not required to pay more than an amount equal to that unit owner’s loss assessment coverage limit as a result of the same direct loss to property.

(4)  Every individual unit owner’s residential property policy must contain a provision stating that the coverage afforded by such policy is excess coverage over the amount recoverable under any other policy covering the same property.