"Houseominiums" in CA

[wrxnut25]

I've been receiving requests lately to write HO3 coverage on homes that are zoned as a condominium.

These condos look like a regular stand alone dwelling, they don't share any walls, but the HOA does not cover the structure, the owner does not own the land the home sits on, and there are some common areas shared amongst the homeowners in the community, i.e. driveways, walkways, community pools, etc.

These homeowners are requesting HO3 coverage since they need coverage for the dwelling, but my carrier is refusing to write an HO3 because we are required to offer CEA (earthquake) policies at new business, and the CEA won't approve a dwelling policy for a condominium.

I'm losing business over this issue, and am wondering if anyone else is running into this same situation with their carriers, that could offer suggestions or recommendations.

Many thanks!

[d's insurance store]

This is just my opinion, and I'm not the underwriter for your preferred carrier, but it sounds to me more like an HO3 exposure with membership in an association that might require loss assessment coverage for the common area.

That's how I'd present it to a carrier...a single family dwelling with an affiliated HOA for common area that does not include the structure. And, CEA would likely offer coverage under those circumstances because the HOA has no obligation to insure the dwelling.

Some carriers call this 'townhouse' coverage, even though it doesn't meet the definitions of an East Coast Townhouse situation where the dwellings sit next to each other with zero clearance, but no common walls.

Are you a captive with only one carrier source, or is it time to perhaps find another market that might be more receptive to your risks in your area?

[wrxnut25]

Thanks for your reply D.

The issue at hand is that the CEA has effectively tied my hands as a participating insurer in their program, I'm required by law to offer their policy whenever I write a homeowners policy, but because they refuse to write a homeowners EQ policy for a home zoned as a condo, my carrier (yes I'm captive) has said that we can't write a HO3 on this type of risk.

Just curious if anyone else has run into this in CA.

[d's insurance store]

Shucks, if you're captive, then you're bound by the underwriting rules of the mother ship, and if they won't recognize what you're describing, then you're out of luck.

BTW, you keep referring to the 'zoning' of this development....but for insurance purposes, you're dealing with what would be called a single family dwelling. The disconnect is coming because your captive carrier won't issue an HO3...if they did, then CEA would not have any issues offering a dwelling earthquake policy.

I can only hope your future isn't tied up with potential sales for this particular development...

[nixonjf]

Will geovera offer a quote? Maybe that would satisfy the requirement.

[LadyBroker]

When I had my condo, I had a quake policy on it, and I believe it was through Geo Vera. This was in 2008, though, the last renewal, so maybe things have changed. I write alot of HOA's specifically for the peril of Quake, and none of my agents seem to have any trouble offering individual policies for the unit owners. I also have several accounts where I insure only the common areas (pool, Rec room/offices, laundries, etc) and again, my agents seem to be able to place the quake for the individual owners. Do you have GeoVera? Maybe it's time to call them!

Good luck!

[wrxnut25]

I'll look into Geovera, thanks for the tip!