South Carolina Personal Lines Practice Exam

An insured is assessed 1200 for her portion of rebuilding the HOA community house that burned down. How much will her HO policy pay for the assessment?

1. Up to 500

2. Up to 1000

3. The full amount

4. Nothing at all

The correct answer is: Up to 1000

In homeowners insurance policies, coverage for assessments imposed by a homeowners association (HOA) is typically included under the policy's property coverage. However, there is usually a limit to how much the policy will pay for such assessments. In this case, the insured is responsible for a $1,200 assessment for rebuilding the community house. Many homeowners policies have a specific limit for this type of coverage, often around $1,000. Therefore, under the assumption that this policy has a limit of $1,000 for assessments, the insurance would indeed pay up to that amount. This understanding highlights the importance of reviewing the specific terms and limits of a homeowners insurance policy to ensure coverage aligns with potential costs associated with HOA assessments.