3 Types of Condo
Insurance Coverage

dwelling
coverage
Scenario 1: Something happens inside YOUR unit
Your dishwasher leaks and damages your floors and cabinets.
This comes from your dwelling coverage. It's purely your problem, your claim.
loss assessment
coverage
Scenario 2: Something happens that damages MULTIPLE units or common areas
A pipe in the wall (shared infrastructure) bursts and damages units 604, 605, and 606, plus a hallway.
The HOA's master insurance policy pays first. But if the damage exceeds what the HOA's policy covers, the HOA can issue a special assessment — billing every unit owner for their share of the gap. Your loss assessment coverage then pays your share of that bill.
liability
coverage
Scenario 3: Something in YOUR unit damages a NEIGHBOR
Your washing machine overflows and water damages the unit below you.
This is a liability situation. Your liability coverage pays for the neighbor's damage.