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- Condominium owners within HOA communities in California have unique challenges finding and obtaining earthquake insurance (EQI) for the common areas and buildings
- The California Earthquake Authority (CEA) has a specific role to ensure the availability of property insurance in the state, including disaster threats like earthquakes
- Even after more than 20 years of marketing, EQI is now covering less than 20% of the homeowner households in California
Number of recorded, actual seismic events in California every 24 hours
(more recent reports below)
Sooner or later, most California homeowners will come face-to-face with a decision about purchasing earthquake insurance (EQI). But the decision for about 50% of the state’s homeowners (those in common interest developments, aka homeowner associations or HOAs) is not clear cut. It is even complicated beyond belief, particularly for condominium owners in HOA communities. We will explain.
About 17 percent of California’s some 7 million residential owner-occupied homes are covered by earthquake insurance despite the fact that the state is reported to have about two-thirds of the USA risk for earthquakes.
For one Bay Area homeowner the EQI purchasing experience was not at all expected…
“The CEA owes its existence to a single earthquake over 20 years ago and a 1980s-era state law: Without the 1994 Northridge earthquake and the 1985 law requiring sellers of home insurance in California to offer earthquake insurance, there would be no CEA.” ~ DANIEL MARSHALL
The California Earthquake Authority (CEA) claims to have $17B in claim-paying capacity, but a catastrophic quake in the state could require $100B in loss, so who will make up the difference? No one knows when the next Big One will happen, nor the amount of destruction to happen at that time.
But we do know CEA has 1 million policies in force (2019) and that represents but a fraction of the total statewide homes, owner occupied or not.But can it be that the CEA does not seek a serious uptake in EQI policies under their jurisdiction because such would increase exposure for claims, the risk factor?
|$200K x 65||$200K rebuilding cost per home in 65 HOAs|
|$17B / $200K per house = 85,000 units repaired under the worst case scenario (so this calculation gives a snapshot of how far $17B might stretch).||= 65 communities like Trilogy Glen Ivy (TGI), the Inland Empire HOA community of 1317 homes (if the TGI community is typical of HOA locations in California, then the $17B of CEA claim-paying capacity will cover something like 65 communities like TGI).|
By comparison, and in reality, the $17B of CEA claim-paying capacity would not cover 10% of all of the HOA communities in Riverside County alone with…
902 HOAs in Riverside County, much less any significant percentage of the HOAs statewide…
48,150 (2018) HOAs in California with 13.7M residents in those communities
Annually, the CEA is required to file a status report with the State of California. Here is the latest on file from August 2019.
But the state’s data outlook fails to answer key questions like…
QUESTION: After 29 years of renting, I finally saved enough for a down payment on a small condo. I really like a building in Riverside with restaurants and other commercial businesses nearby, but it is not retrofitted and the association doesn’t have earthquake insurance. The lenders tell me they don’t require earthquake insurance to make a loan.
But my parents are warning me that without insurance there won’t be enough money to fix both common areas and individual units and I’ll lose my investment. If I’m financing most of my purchase and the lender doesn’t require it, why get it?
We live in the condo section of an Inland Empire HOA community where EQI is not included in member dues. That practice (automatic EQI) exists in a minority of HOA condo communities. For what reason? Mostly because the CEA does not directly market EQI policies for common interest developments to associations. They require this market to obtain EQI from the secondary agencies like Lloyds of London, from brokers not enrolled under the state Department of Insurance. onQuora
ANSWER: Even if earthquake insurance is not required, a borrower living in California should still perform a careful cost-benefit analysis before making a final decision. After all, the 1994 Northridge earthquake caused an estimated $20 billion in property damage, prompting close to 700,000 applications by homeowners and businesses for disaster aid. What would $100 billion in damage cause? At least five times the Northridge quake loss.
While it may seem that living in earthquake country would mean there is a requirement that homeowners associations buy earthquake insurance, that is not the case — just as it is not required that homeowners buy insurance for their own property.
There is no evidence that CEA even targets HOAs for EQI purchase* despite the fact that more than 50% of state communities are so designed.
|*||Currently, condominium owners in HOA communities may purchase EQI CEA-authored policies ONLY for internal buildings, personal property, loss of use, and loss assessment, but nothing of the external structure although all quakes begin with external phenomena|
Proof of this conclusion is found in the current CEA policy to maintain two tiers of business lines for the earthquake insurance market in California.
- The 25 Participating Earthquake Insurance Providers (enrolled agents). These agents may write policies for the internal condo dwellings, loss of use, and loss assessment protections, but nothing for the external dwellings and structures, including parks and roadways.
- Secondary market includes all other insurance carriers in California (some based overseas) who offer EQI but at not enrolled agents with the state Department of Insurance
It is this secondary market to which commercial entities, including homeowner associations, must rely to find and purchase EQI.
CEA does not send reps to individual community meetings, but they rely on individual brokers to communicate and offer CEA products.
What’s more, CEA (internal building property losses, loss or use, loss assessment, etc) are the only lines CEA carries. HOA and corporate policies for common area coverage all go to secondary line carriers like Lloyds of London and those lines are not regulated by the Department of Insurance (DOI). Hence, HOA EQI policies cannot be adjudicated or mediated through the DOI.
The uncertainty about EQI purchase is complicated for any homeowner in a California HOA. One reason is that historically, earthquake insurance has been very expensive, and often comes with exclusions and limited coverage. But it has recently become more affordable through the CEA a privately funded public agency established two years after the 1994 Northridge temblor.
But even though there are no explicit requirements, responsible association management should have a game plan for managing and recovering from an eventual costly disaster such as an earthquake, but almost no HOA does. HOA disaster recovery plans are as scarce as a Southern California rain storm in the summer.
Some boards forgo earthquake insurance because they want to keep the monthly dues low or anticipate a special assessment should there be significant damages after an earthquake. Obviously, this would be a strategy more attractive, say, to a larger complex of single-family homes with a handful of common-area structures, than a complex that includes condominiums and significant other common areas.
Some associations also may be relying on the Federal Emergency Management Agency to take care of earthquake damage. But state and federal government residential disaster-assistance programs, if available, adhere to strict eligibility criteria. FEMA offers temporary housing and cash assistance for a variety of needs but does not make an owner whole. And any aid to fix or rebuild homes is given in the form of loans that must be repaid. FEMA places HOAs at the bottom of their priority list because HOAs are commercial enterprises that have member emergency assessment options.
As already reported, the CEA — www.earthquakeauthority.com — is the largest provider of residential earthquake insurance in the United States and as of 2018, CEA wrote about 80% of all residential earthquake policies sold in California with more than one million policies in force. The authority is willing to insure homes even if the homeowners association does not have one itself.
However, there are some caveats. The insurance is provided through a carrier that must be a CEA participating insurer. Also, based on the definition of residential property insurance under California Insurance Code section 10087, mixed-use properties are not eligible for CEA policies. Be sure you understand whether your policy covers your personal belongings, your structure or both.
The CEA website features a handy insurance premium cost calculator that can help you get some sense of what your policy might cost.
Titleholders also should strongly consider buying earthquake loss-assessment policies as part of their own coverage. The insurance covers HOA special assessments due to earthquake damage but are often limited to $100,000.
Even if an association has its own coverage, it may need to assess in order to rebuild. Without adequate coverage, it almost certainly will have to impose emergency assessments and/or specially assess each titleholder.
Owners must not rely on an association or lender to protect their investment. Without purchasing adequate insurance you are exchanging your hard work, down payment and monthly mortgage payments for a home that may be irreparably damaged by a natural disaster. After saving and investing for a lifetime, now is not the time to make a foolish decision.
Here is a list of the top insurance companies writing earthquake coverage provided by Insurance Journal’s research partner Demotech Inc.
READ ▶ (Circa 2015)
December 9 is the scheduled release of the long-anticipated FISA Court abuse report from the Department of Justice Inspector General Michael Horowitz. Here is some amplified previews of this content which is already creating much speculation and concern on every political aisle.
A TRILOGY of other questions?
With Congress taking a Thanksgiving break, what is the impeachment timeline for December?
Why did George Soros’ name come up with links to Ukraine?
Who, besides Kevin Clinesmith, will the Horowitz report indict in the FISA court abuse case?
Department of Justice Inspector General Michael E. Horowitz announces the release of an Audit on the FBI’s Management of its Confidential Human Source Validation Processes.
If you have any questions about the work done by the IG of the DOJ, then consult the content above, all of which is found at oversight.gov
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* SCS: CASTING the constant comments, stories, and ‘social currents’ of publisher, curator, webmaster ALTALOMAN with a view of the sites below. Now retired, Mike & Dee Dee celebrate his survival with mantle cell lymphoma (MCL) since Mar. 06, including a stem cell transplant from an unrelated donor in 2007 and TomoTherapy in 2009. * From these and other life experiences, I have attached the moniker, “CANSWERIST®” to my profile.
“ALTALOMAN®” is the creator and founder, web visionary, synergist and archivist for a variety of sites (some under the moniker ALTACITIES®), a family of web locations dealing with assorted life issues and important matters.
Russian hoax is now the Ukrainian hoax and how Mueller investigation was botched at the beginning…
Investigative journalist Lee Smith uses his unprecedented access to Congressman Devin Nunes, former head of the House Intelligence Committee, to expose the deep state operation against the president–and the American people.
Investigative journalist Lee Smith’s The Plot Against the President tells the story of how Congressman Devin Nunes uncovered the operation to bring down the commander-in-chief. While popular opinion holds that Russia subverted democratic processes during the 2016 elections, the real damage was done not by Moscow or any other foreign actor. Rather, this was a slow-moving coup engineered by a coterie of the American elite, the “deep state,” targeting not only the president, but also the rest of the country. The plot officially began July 31, 2016 with the counterintelligence investigation that the FBI opened to probe Russian infiltration of Donald Trump’s presidential campaign. But the bureau never followed any Russians. In fact, it was an operation to sabotage Trump, the candidate, then president-elect, and finally the presidency. The conspirators included political operatives, law enforcement and intelligence officials, and the press.
The plot was uncovered by Nunes, chairman of the House Intelligence Committee, and his investigative team. They understood that the target of the operation wasn’t just Trump, but rather the institutions that sustain our republic. A country where operatives use the intelligence and security services to protect their privileges by spying on Americans, coordinating with the press, and using extra-constitutional means to undermine an election then undo a presidency is more like the third world than the republic envisioned by the founding fathers.
Without Nunes and his team, the plot against the president — and against the country — never would have been revealed. Told from the perspective of Nunes and his crack investigators — men and women who banded together to do the right thing at a crucial moment for our democracy — the story of the biggest political scandal in a generation reads like a great detective novel, feels like a classic cowboy movie. The congressman from the cattle capital of California really did fight corruption in Washington. Devin Nunes took on the “deep state.”
Archiving the real congressional legislation that may make the DEEP STATE deeper than it is today…
What is archived above is a PDF of the reintroduced bill (H.R.1111) that is innocuously titled, “To establish a Department of Peacebuilding, and for other purposes”
The video that follows is a nearly a 30-minute commentary on H.R.1111 from independent YouTube producer Dave Hodges.
All I have to say at this time is read the bill and form your own opinion. The Hodges commentary prompts me to remember when I first heard that the next role that is most coveted by former President Barrack Obama is the title of Secretary General of the United Nations. Not likely, right, as long as Donald Trump holds the title of POTUS? When the issue was raised in the past, the idea was rebutted by many fact checkers. But if you view the video below, you can see the great mutual admiration between Obama and his United Nations gallery during his last address before that body.
By the way, I have scoured the web to search for additional commentary (left and right) on HR1111, but have found none, so, that leads me to post a question on QUORA.
Sebastian Lukács Gorka is a British-born Hungarian-American military and intelligence analyst, who served as a Deputy Assistant to the President in the administration of U.S. President Donald Trump. He served from January 2017 until August 25, 2017. He broadcasts a Salem Radio show. He was a Fox News contributor from 2017 to 2019.
“Take it from someone who has been on the inside, who understands the fight we are currently in, and who knows what must be done to save our country. Dr. Sebastian Gorka’s latest book, The War for America’s Soul, leverages the former White House strategist’s expertise, driven by his determination to preserve what made America great in the first place.” — reviewed by MARK LEVIN
According to Gorka, “Our country is at war with itself.
“On one side are American patriots, dedicated to freedom under the Constitution; on the other side are leftists campaigning not just to win elections, but to radically transform the nation. In this political war for the soul of our country, America’s patriots need a strategist with a blueprint for victory.
“Luckily, we have such a man in Dr. Sebastian Gorka—a former strategist for President Trump and now a nationally syndicated radio host and a fearless culture warrior.”
In his essential new book, The War for America’s Soul, Dr. Gorka shows how America’s elite—in both parties—betrayed our heartland, sabotaged the American dream, and accepted national decline as inevitable. It took a candidate with remarkable vision, dauntless courage, and unbreakable determination to change the narrative. That man was Donald Trump. A candidate who owed no favors to special interests, Trump articulated a new American nationalism that has been an extraordinary force for economic and political renewal.
With the video embed above and the Kindle book preview of content created by Wall Street Journal columnist and bestselling author Kim Strassel, we note how the journalist-pundit argues how the all-out “Resistance“ has become dangerously reckless in its obstruction of President Trump.
Among the most consistent and aggressive criticisms of Donald Trump is that he is a threat to American democracy — a human wrecking ball demolishing our most basic values and institutions. Resistance (At All Costs) makes the opposite case — that it is Trump’s critics, in their zeal to oppose the president, who are undermining our foundations.
From the FBI’s unprecedented counterintelligence investigation into the Trump campaign, to bureaucratic sabotage, to media partisanship, to the drive-by character assassination of Trump nominee Brett Kavanaugh, the president’s foes have thrown aside norms, due process and the rule of law.
Resistance (At All Costs) shows that the reaction to Trump will prove far more consequential and damaging to our nation long-term than Trump’s time in office.View my Flipboard Magazine. https://cdn.flipboard.com/web/buttons/js/flbuttons.min.js
Solar panels for home – 9 months later! According to the YT source Undecided with Matt Ferrell,
“It’s the video many of you have been asking for. Ever since I published the video about my solar panel system on my home earlier in the year, and my experience with the installation and energy production I’ve been seeing, I’ve been asked for an update on how it’s going. By a lot of people. Well, it’s time. How much energy production have I been seeing? How much money have I spent on versus how much I’ve saved? I’m going to cover it ”
Even though I live on the left coast and Mat Farrell resides about as distant as he can be and still live in the continental USA, his video peeks interest because California may be the leading state to advocate solar energy for homes. Alas, we live in a condo (actually, the down stairs unit of a two-story, two-unit condo which means, technically, our unit has no roof. The analysis is all for naught because our HOA has not voted approval for solar for the some 170 condo units in our 1317-home community in the Temescal Valley, Inland Empire, Southern California.
When you change the way you look at things,
the things you look at change
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ex·on·er·ate/iɡˈzänəˌrāt/verb 1.(especially of an official body) absolve (someone) from blame for a fault or wrongdoing, especially after due consideration of the case.”they should exonerate these men from this crime”synonyms: absolve, clear, acquit, declare innocent, find innocent, pronounce not guilty, discharge;
2. release someone from (a duty or obligation). synonyms: release, discharge, relieve, free, liberate; More
Perhaps no other word in the 400+ pages of the Mueller Report was as controversial or dissected than the word, exonerate. Exoneration occurs when the conviction for a crime is reversed, either through demonstration of innocence, a flaw in the conviction, or otherwise. Attempts to exonerate convicts are particularly controversial in death penalty cases, especially where new evidence is put forth after the execution has taken place.
Nothing in the American system of justice requires investigators and prosecutors to exonerate the subject of an investigation and on that point Mueller had no defense for his statement.
The Mueller Report is the culmination of 22 months of investigation into potential Russian interference in the 2016 U.S. presidential election. There may never be a document like this again in our lifetimes. We do not know its consequences yet, and the next 22 months will confront us with decisions to make that will ripple through history – and our lives – for generations. Democrat, Republican or none of the above, read the report for yourself. Come to your own conclusions unfiltered through the agenda of the media, pundits, politicians, lobbyists, and the latest hot take from “experts” who said a Trump presidency was impossible. This version of the report was released to the public on April 18, 2019 and has been formatted specifically for Kindle using Kindle software.View my Flipboard Magazine.