Since we live in earthquake territory, it is wise to obtain earthquake insurance if you can afford it. However, if you are thinking of purchasing a condo or townhome, it is definitely a must.
Many builders and realtors will say that a newer building was built to present day earthquake standards, and that earthquake insurance is not necessary. Earthquake insurance is certainly not mandatory, but I remember the Northridge Mall after the 1994 earthquake and saw the steel girders bent in half. The force it took to do such an act of bending steel girders or leveling apartments/condos is something none of us know or can predict. We never know where the next earthquake will hit and how strong it will be.
If you purchase a condo/townhouse, please make sure it has earthquake insurance in the HOA dues. If not, whatever money you put down will be lost forever and you still probably have a mortgage to pay…unless otherwise stated in your loan documents. Plus, you won’t have a place to live.
If the entire complex does not have earthquake insurance, you CANNOT buy earthquake insurance for your condo/townhome. You can have separate homeowner’s insurance to cover the contents inside your unit, but that’s it.
I had a client who paid $1,000,000 for a penthouse in West Los Angeles. Fortunately, the HOA had earthquake insurance or she would run the risk of losing $1,000,000. What a terrible chance to take!!!
Your realtor can always find out if there is earthquake insurance or not by making a call to the listing agent, the homeowner’s association or to the management company if there is one. Quite a simple solution to avoid a costly mistake I would say!!!
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