How to deal with Insurance companies when HOA has imposed Special Assessments.

[Kiran Dayalu]

Hi there,

I need guidance regarding a situation with one of my rental condos in Washington state. The condo HOA has imposed a $14,000 special assessment on all condo owners in the complex to fix water issues across the buildings. We have until the end of this year to pay the assessment. The project will start soon, and I believe it will take that long for the construction company to complete the work on all the buildings.

I have landlord insurance with State Farm, which includes coverage for loss assessments that should cover this amount. I have a few questions:

1. Should I contact State Farm right away or wait until the project is complete?

2. My current insurance was recently renewed and is valid until January of next year. 

3. Could State Farm increase my premium or, worst case, cancel my policy? This would be my first claim in seven years with them.

4. Is there anything else I need to ensure before I approach them?

I greatly appreciate your replies on this matter.

Thank you,