HOA Earthquake Insurance
Community associations have been debating their liability as to whether or not they should buy a master earthquake insurance policy, especially now that the insurance companies have placed premiums extraordinarily high. Communities that did not have HOA earthquake insurance coverage have had and are still having a hard time recovering years after the devastation of the Northridge earthquake. The individual condominium owners were forced to pay for the repairs and rebuild of the structures. Homeowners associations who are actively involved in protecting their homeowners have many areas to consider when purchasing additional master insurance policies. The standard HOA policies usually cover all damage caused by wind, fire, rain, flood and lightening. Earthquake coverage is purchased under its own separate policy, and most HOA’s are getting hit with high bids for renewal of earthquake insurance policies. Some are no longer qualified for insurance through many brokers. So where is the balance between high premiums and the risk of having no insurance against the chance of earthquake. Homeowners Association insurance is provided by the board of directors for the entire housing association plan. The individual homeowners must also have their own personal homeowners insurance just like their automotive insurance in addition to the coverage they receive from the HOA insurance. Premiums for master insurance policies have skyrocketed in the last few years. In return, associations have had to accept significantly higher deductibles, which are usually passed on to the individual unit owners. The HOA board needs to gather sufficient information so that members can decide together what the best option for their association is. While most boards have the authority to decide whether or not to purchase earthquake insurance, it would be judicious and considerate to permit the overall membership of the community to vote on this very important issue in order to minimize it’s liability in the event of an earthquake. Amounts of coverage and premiums vary according to how many units are in the housing plan, your geographic location and seismic zone that you are in. Obtaining several different insurance quotes from many different lenders will insure you are given competitive rates and coverage for your association. |