Owner Loss Assessment Earthquake Insurance

OWNER EARTHQUAKE
LOSS ASSESSMENT INSURANCE

Owners should consider some form of individual earthquake coverage, particularly "earthquake loss assessment" insurance. Whether the association carries earthquake insurance for the buildings or not, condo owners have a risk of their own.

In the event of a major earthquake their association (with or without earthquake insurance) may be forced to "special assess" each owner to help cover earthquake insurance deductibles or to pay for the repairs if there is no earthquake coverage.

In some cases this could be a substantial amount of money. To protect condo owners, there is a special program in California called the California Earthquake Authority (CEA). Many insurance providers such as Farmers, State Farm, Allstate, AAA, etc. can obtain "earthquake loss assessment" insurance for you. However, you must have a unit owner's policy in place with a CEA approved carrier to purchase the CEA coverage.

The CEA insurance provides some basic earthquake coverage to the individual owner of a condominium. The CEA offers base and supplemental insurance that will pay for:

Damage to personal property (contents) from $5,000 to $100,000.
Upgrade to current building codes is $10,000.
Emergency living expenses (loss of use) $1,500. to $15,000.
Building damage to the interior of the condo is $25,000.
Pay for assessments levied against you by your condominium association to pay for earthquake damage - $25,000 and $50,000.

The "earthquake loss assessment" policy has a 15% deductible. The other supplements have different deductibles. If you selected the loss assessment coverage of $50,000., and you were assessed by your association the amount of $50,000., your deductible would be $7500.

The cost of the CEA policy is relatively inexpensive depending on the level of coverage you take. Wouldn't you agree that $7500. out of pocket is much easier to handle than the potential of a $50,000. special assessment?

The "earthquake loss assessment" will only cover a special assessment established to replace the living units, it will not cover the common areas, pools, patios, fences, landscaping, etc.

Thank you to Kay Ladner of the LaBarre/Oksnee Insurance Agency for this information.

Updated by ADAMS KESSLER 5/7/2008