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 Posted: Wed Apr 21, 2010 9:23 pm Post subject: Supplemental Earthquake Coverage |
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Hi,
We own a townhouse and our HOA covers the structure with earthquake insurance, but of course that does not cover loss of use, personal belongings, etc. Is there any company out there that will sell us supplemental coverage on these items? We do have an HO-6 for our personal belongings, but as far as I know this isn't true in an earthquake.
I've asked my current insurance company to give us this coverage, but they can only insure the entire structure, which is redundant.
Thanks,
Nick |
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webbn
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| Posted: Thu Apr 22, 2010 2:29 am Post subject: |
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What state are you in?
Generally, earthquake coverage applies to structural damage and contents, but with a very high deductible (like 30% of declared structural value. As a condo dweller, you have little or no liability for structural damage (that's why the association has the EQ policy), and the value of your contents, by the time you accounted for the high deductible, probably leaves very little as actual liability on the part of the insurer to you.
I doubt that an EQ policy is in you best interest. For more information, you can see the CA Earthquake Authority's site: http://www.earthquakeauthority.com/
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CA-licensed P&C Broker-Agent and Life Agent. CA Insurance Lic #0596197. Now investigating insurance company abuses, and providing litigation support and expert witness services. Send me your questions, and I'll send you my answers. |
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MaxHerr
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| Posted: Thu Apr 22, 2010 3:00 am Post subject: Supplemental Earthquake Coverage |
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Thanks MaxHerr,
I live in Washington State (Seattle), and while we haven't had a very major earthquake for many years, they say it's pretty likely we will have one here.
Our HOA deductible is only 10% for earthquake, but I assume that only covers the structure, no contents, etc. ("drywall out"). I know that's still pretty good as we'd at least get our unit mostly rebuilt even if the neighborhood was wiped out.
It makes sense that it might not be worthwhile to pay for additional coverage. I do have another condo I own and rent out, and it's earthquake coverage does cover personal belongings ($5k) and loss of use ($1.5k) and a 10% deductible... about $225/year (very small unit, 700sqft).
Thanks for your input! |
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webbn
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| Posted: Sat Apr 24, 2010 9:19 pm Post subject: |
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As supplemental coverage, an earthquake policy will normally cover the same risks as the underlying homeowner's policy -- those risks being excluded due to earthquake. Masonry "appurtenant" structures (block walls, patio slabs, swimming pools, brick planters, fascia, etc) are almost always excluded from EQ policies since they almost always suffer catastrophic damage as the result of large shakers.
The rub with EQ policies is the deductible. Here in CA, the CEA issues policies through cooperating insurers with a choice of 10% or 15% deductibles. Problem is, in Los Angeles County, where I reside, the average price of residential real estate is in the neighborhood of $400,000. So a 15% deductible will not cover the first $60,000 in losses. It may not be possible to rebuild to like-for-like with the 85% available, let alone finding a way to come up with the $60,000 since the banks aren't much inclined to lend money these days. A $400,000 CEA policy in one of the high seismic zones with a 10% deductible is over $1,000/year (doubling the cost of an HO3 homeowner's policy). The 15% deductible policy is more than $700. True, it's a small price to pay, either way, but in these times of pinching the poop out of the buffalo on the nickel, most folks choose to pass.
In WA state, where residential property is about 60% that of So CA, the 10% deductible means $25,000 - $30,000 . . . painful, but considerably less than here. And premiums in WA are also likely to be 50%-70% less due to the decreased risk.
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CA-licensed P&C Broker-Agent and Life Agent. CA Insurance Lic #0596197. Now investigating insurance company abuses, and providing litigation support and expert witness services. Send me your questions, and I'll send you my answers. |
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MaxHerr
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