Do You Need Earthquake Insurance for Your San Diego Condo?
Photo Credit: Flickr: Michael R. Perry
IT'S A QUESTION every California homeowner needs to consider: Should I buy earthquake insurance? Lenders typically don’t require earthquake insurance, even if they’re putting up the lion’s share of the purchase price. Instead, homeowners need to weigh the pros and cons themselves to decide if the price of the insurance is worth it.
If you own or are looking to buy a condo in San Diego, that decision can be even more complicated.
If you buy earthquake insurance for your condo, the policy only covers the interior of your unit. Homeowners associations can also purchase earthquake insurance that covers the building and other common areas. However, HOAs are not legally obligated to have earthquake insurance, unlike fire and liability insurance. And because earthquake insurance is pricey and can significantly increase HOA dues, many HOAs choose not to carry it.
What does this mean for you as a condo owner? If your building as a whole becomes unlivable or is destroyed due to an earthquake, chances are, it will not be rebuilt by insurance. Instead, the condo owners themselves will be faced with a tough decision: either everyone chips in a lot of money to rebuild OR walk away with nothing. You might consider always carrying a loan for your condo, so your lender becomes the bigger loser (instead of you) in a worst-case scenario.
Buying a condo - or any home - in San Diego is clearly a big investment, so it’s important to be aware of all the risks involved. If you do proceed with purchasing a condo in San Diego, you should at least consider insuring the contents of your condo against earthquakes. That way, at least your belongings will be protected in the case of a disaster.
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Justin Gramm is the founder and principal broker of Globella Buyers Realty, your San Diego Exclusive Buyer Brokerage.
Exclusive Buyer Agents do not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.
If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. Call Justin at 858-437-2662 or Email.
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