How much will the Loss Assessment additional coverage of a homeowner's liability policy pay when assessed $2,000?

The Loss Assessment additional coverage in a homeowner’s liability policy is designed to help policyholders cover costs when they are assessed for damages by a homeowner association (HOA) or similar entity. In Idaho, this coverage typically pays up to a specified limit per occurrence, which is often $1,000.

When a homeowner is assessed $2,000, the policy will only provide coverage up to the limit specified—$1,000 in this case. Therefore, regardless of the amount assessed, the policyholder would receive payment only up to that limit. This is why the correct answer reflects the maximum coverage amount rather than the total assessment amount.

Understanding the limitations on coverage like Loss Assessment helps in managing expectations regarding potential liabilities and working with HOAs, ensuring that homeowners are aware of their coverage limits in these situations.