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Condo Coverage Basics

Condo Coverage Basics

Is your customer’s condo unit ready for the next earthquake, and have you explained how Loss Assessment and Loss of Use coverages from CEA may help them recover?

CEA condominium earthquake insurance policies provide your customers with the strength they need to recover from a damaging earthquake.

The insured’s homeowner’s association (HOA) may have earthquake insurance for common areas and the exterior and structure of the building. But that master earthquake policy doesn’t cover the inside of the insured’s unit or their personal belongings, nor will it compensate them for loss of use.

The association may also require condo-unit owners to share in the association’s repair costs or pay part of the association’s policy deductible by imposing a loss assessment. This loss assessment is not often understood by insureds, leaving you a great opportunity to be of service in helping them understand their potential liabilities and how you can help.

Loss Assessment Coverage

Loss assessment coverage helps cover the cost of special assessments HOAs may charge unit owners for the cost of repairing unit structures, or towards the HOA’s master policy deductible. Up to their chosen coverage limit, Loss Assessment coverage helps pay your customer's share of certain assessments levied by their HOA on its members for earthquake-damage repairs or to pay a master-policy deductible. This coverage can help with charges for repairs to the exterior of your customer's condo development or certain common areas, as well as building code upgrades. Useful when certain charges get passed on to the insured by their HOA after an earthquake.

Loss Assessment coverage can be added to the insured’s CEA condo policy and has options up to $100,000 for an individual unit owner. For all terms and conditions please read the CEA condominium policy.

Loss of Use

Loss of Use coverage pays for additional living expenses if the insured can’t live in their unit after an earthquake because of earthquake damage. Additionally, it’s important to know that if the insured’s unit functions as a rental property, and their tenant must move out due to earthquake damage, Loss of Use coverage can compensate the insured for lost rental income. Also, this coverage never has a deductible.

Want a deeper dive on condo? Read about all the different types of CEA condo coverages in How to Prevent a Disaster: Condo-Unit Owners Part 1 – Coverage Options and How to Prevent a Disaster: Condo-Unit Owners Part 2 – Loss Assessment.

The Benefits of Learning More

These are just some of the many Condominium policy insights available to you on the Agent Portal.

We also offer free CEA earthquake policy training, which includes an in-depth review of our policies, a full comparison of our standard and Choice homeowners policies, policy enhancements, information about how the deductible is applied, and overcoming objections. Sign up for a training today!

With CEA’s available training options, you’ll be ready for any CEA earthquake insurance question that comes your way. Not only will it make you a valuable resource to your policyholders but, in addition to earning 2 FREE CEs, you’ll reap many other benefits as well:

  • Customer retention: The more insurance products you can offer and expertly discuss, the less likely your customers will look for another agent. And since the retention rate for CEA policies is about 90%, it makes sense to train up on CEA earthquake insurance.
  • ​Growing your book of business: On average, 9 out of 10 of your clients need earthquake insurance, so there is potential for increased commission.

We hope to see you in a training session soon.