Jonathan Naranjo from Newfront Insurance talks with Matthew Holbrook and Matt Davidson about HOAs and earthquake insurance – what you should know and why you might or might not want that coverage for your HOA.
Key Topics
- The Importance of Earthquake Insurance: Jonathan Naranjo explains why earthquake insurance is crucial for HOAs in earthquake-prone areas like California. He discusses the considerations board members should take into account, including building structure, community risk tolerance, and financial implications.
- Understanding Policy Structure and Deductibles: The discussion highlights the difference between standard property policies and earthquake insurance, focusing on the unique deductible structures. Learn how deductibles are calculated based on the total insurable value of the building and how this impacts the overall coverage.
- The Role of Probable Maximum Loss (PML) Studies: Discover the significance of PML studies in determining appropriate coverage limits. Jonathan and Matt explain how these studies help avoid underinsuring or overinsuring and provide a basis for educated decision-making by the board.
- Market Trends and Challenges: Get insights into the current state of the earthquake insurance market, including the impact of global catastrophic events, reinsurance costs, and capacity challenges. Understand why premiums are increasing despite a lack of recent significant earthquakes in California.
- Options for Individual Homeowners: The episode also explores alternatives for homeowners when the HOA does not purchase earthquake insurance. Learn about standalone policies like the California Earthquake Authority (CEA) and more comprehensive options like those offered by Modis Insurance.
- Best Practices for Procuring Insurance: Gain valuable tips on how to approach the renewal process, including the importance of early planning, understanding market conditions, and ensuring adequate building valuations.
Resources
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