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As seen on the LA Times:
Question: I’m on the board at our common interest development with about twelve townhouse units. We’re built on bedrock, so the management company says the attorney said we don’t need homeowner association earthquake insurance. And if something ever did happen, well, he says, “That’s what FEMA is for.” I’m not certain how this works. What’s FEMA going to do for us?
Answer: A wrong decision regarding earthquake coverage, including having no coverage, could be devastating to the association and individual titleholders. To justify no coverage or substantially less than full coverage, a board would have to consult competent authorities (including geologists, structural engineers, statisticians and accountants) culminating in a complex risk analysis.
The required expertise has in effect already been gathered and distilled by insurance companies and is reflected in policies available to homeowner associations.
Accepting geological advice from a lawyer is akin to hiring that attorney to also advise on tree trimming and heart surgery. The board shouldn’t be listening to that attorney even for legal advice since his client, the management company, is potentially adverse to your association.
Assuming the scrap of hearsay is correct, being “on bedrock” might sidestep some geologic perils, but bedrock can still shake violently, crack, rise, dislodge or be subject to other destructive and unpredictable forces. Succinctly, best put your bedrock hopes to bed.
Like the lawyer’s geology “wisdom,” his advice about the Federal Emergency Management Agency is without foundation.
FEMA is not a supplemental or “default” insurer. Nor is it an insurer of last resort.
As an emergency relief program for providing temporary shelter and food, FEMA is not intended to return you to your standard of living prior to the disaster. In particular, this assistance is not intended to restore damaged property to its pre-disaster condition.
More important, FEMA’s mandate is helping individuals, not corporations.
Finally, not everyone qualifies for FEMA. The application process can be prolonged and cumbersome. There’s no guarantee an application will yield any assistance at all.
For more information regarding earthquake insurance, contact Scott Litman Insurance Agency, Inc.