CALIFORNIA EARTHQUAKE AUTHORITY (CEA) EARTHQUAKE (EQ) COVERAGE FOR HOMEOWNERS OR RENTERS – Article provided by Erin Rose
California Earthquake Authority (CEA) is available to owners or renters of condominiums, townhomes and other units in the common interest developments.
Association EQ insurance policies cover only the structures and typically would have a very high deductible. The CEA helps the homeowner cover their deductible, as well as provide coverage for their contents, any upgrades to the home and loss of use of their unit. There is a separate deductible that would apply to the homeowner’s CEA policy, in addition to the HOA’s deductible. It insures the following for earthquake damage and deductibles apply:
Real Property: Building additions, upgrades and alterations are included.
Personal Property: Association’s EQ policy will not cover your personal belongings
Loss of Use: Additional living expenses if you have to move out while repairs are made.
Earthquake Loss Assessment Coverage: This coverage will pay for your share of earthquake damage to the Association property when you are assessed because the Association either had no coverage or they need to meet their policies deductible.
What is Loss Assessment?
In condominium communities, the exterior of buildings, certain building components and common areas are typically owned by all the condominium owners as a group. In the event of EQ damage to such property, the association may, in accordance with its bylaws, impose an assessment against all members of the association to pay for exterior or structural repairs. This coverage is unique to condominium owners, in that if damage from an EQ occurs and the losses are not fully covered by the association’s master insurance policy, Loss Assessment coverage will help you pay for your share of certain assessments the association may impose on all property owners in your condominium development. A partial list of assessments not covered are those made to pay for the repair of non-residential structures, awnings, patio coverings, pools, spas, clubhouses, artistic features or separate parking structures.
Basically, a homeowner CEA policy works similarly to how a homeowner’s personal policy would work. The HOA’s property & liability policy pays for the association’s liability and property (including the buildings), but does not pay for the homeowner’s liability or contents; thus the need for a homeowner to purchase their own personal policy. The CEA policy is the same basic idea in that HOA has their own EQ policy that covers their property (including the buildings), while the CEA policy covers the homeowners’ property.
CEA Policies are sold only through participating Insurance Companies and you must have your residential property “companion” policy with the same carrier to obtain a proposal.
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