This provides coverage for the part of a loss assessment made necessary by a deductible in the insurance policy of the condominium/strata corporation.
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For example, the building lobby is damaged due to a fire and costs $100,000 in repairs. The condo corporation files a claim for the damages under its insurance policy. However, their insurance policy has a deductible of $50,000. In this case, the corporation will need to collect this amount from all the unit owners in order to get the damage repaired. If there are 100 unit owners in your building, you may be assessed approximately $1,000 to make up for the deductible.