Condo buildings without a master earthquake policy rely solely on the unit owners to cover any damage to the building and common areas. In this case, it might seem obvious to maintain a personal earthquake policy to help lower your exposure for your portion of the assessed damages.
But what if your HOA maintains a master earthquake policy? Is that enough coverage? It is still important to consider a personal policy. In the event of a loss, the master policy will not cover your personal property, additional living expenses and most policies won’t cover your interior unit. However, the most important coverage to consider on a personal earthquake policy is loss assessment.
Below are four basic coverages on an individual condo owner’s earthquake policy to help protect you.
- Loss Assessment
- Personal Property
- Building Property
- Loss Use of Coverage
- Earthquake Loss Assessment
If there is an earthquake loss, your HOA will levy assessments to each unit owner equally to cover earthquake damages to the building and common areas. Even if your HOA has a master earthquake policy you will be assessed your share of the deductible amount. In both cases, you will still be assessed even if your unit doesn’t sustain any direct damage.
The Earthquake Loss Assessment coverage is a very important coverage to understand because there is a misconception that if your HOA has an earthquake policy you are covered and you won’t have any out-of-pocket expense.
- Earthquake Personal Property
This insures your personal property within your condo unit such as clothing, furniture, electronics, etc. from a loss due to earthquake. Note, some personal property categories have coverage limitations. Your agent can provide more details.
- Earthquake Building Property (walls-in)
Covers damages within the interior unit of your condo. This includes flooring, window/wall treatments, cabinets, interior walls, fixtures, etc.
- Earthquake Loss of Use Coverage
It pays for necessary additional living expenses if you must vacate your home due to earthquake damage. This coverage includes staying at a hotel or renting another location if long-term.
Important note regarding personal auto insurance
The HOA is not responsible for and does not insure against earthquake damage to your vehicle. You can insure your vehicle for earthquake damage by maintaining comprehensive (sometimes called “other-than-collision”) coverage on your personal auto policy.
This blog post is not offered, and should not be relied on, as insurance advice. You should consult an insurance agent for advice in specific situations.