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Bradley F. Cole's Blog

By Monte Hartman and Brad F. Cole | Agent in 90064

What is the current demand for EQ insurance in todays condo buyers?

Years ago when in a sellers market, many of my buyers did not have Earthquake Insurance as one of their top wants when purchasing a condo.  The inventory was low and selling at an alarming rate so it was buy or not move.  Obviously today’s environment is much, much different.  Only more than inventory has changed.  Despite declining condo prices the yearly premium for some condo associations has steadily increased causing many buildings owners to opt out of having EQ insurance to keep the monthly HOA payments low.  Keeping the monthly dues lows is always a concern especially today since it appears that many buildings, due to economic reasons, have had trouble collecting the monthly dues from their respective owners thus possibly causing policies to lapse and many building have voted just not to carry it and hope that FEMA comes to the rescue. 

 

For example, take Santa Monica.  There are 148 condos showing for sale today in the MLS and only 43 of them are listed with EQ insurance.  That’s only 30%.  My question is to Realtors, are you finding your condo clients favoring earthquake insurance buildings now that prices have dropped to cover the added monthly HOA fee to cover EQ? 

 

The answer is basically yes for my condo buyers.  They want it all in this market.  I have found my they prefer buying newer, better built condos because they can since prices have dropped because they can get better, stronger construction.  They will consider older, retrofitted buildings with EQ but are choosing not to buy older buildings without it.

 

How about you buyers out there...how important is EQ insurance to you and how much are you willing to pay for it?

 

Of course there are many factors to consider when analyzing insurance that are not covered here, this is meant only as a topic for discussion…

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