Crown Harbor Homeowner Association

Earthquake

In the event of an earthquake, here are some things to consider:

• Like for most condominium associations, the Association owns the structure, and the Unit Owner owns the inside including doors, windows, and skylights. In the event of an earthquake, the Association earthquake insurance should cover replacement of the Association owned structure; however it also covers replacement of doors, windows, and skylights with one important caveat. The Association policy only covers replacement of these items as per the original building specifications.

  Here's a simple example:

  If an Owner has installed some very fancy wooden dual-pane windows, the Association's earthquake policy only covers replacing them with the original aluminum single pane windows, since that is what was used in 1979-1980. Luckily building codes have changed, and vinyl/dual-pane are required, so that is what would be used, but it is very unlikely that windows as impressive/expensive as the ones being replaced would get installed.

  Owners should consider additional earthquake insurance of their own if they have such a concern.

• In the event of an earthquake, and there is major damage to the buildings, the Association policy has a 20% deductible, and this can lead to a large special assessment to cover it. The Association's cost can be in the millions of dollars. Owners are obligated to contribute that Owner's equal share of the insurance deductible whether or not the Owner's Unit and/or Building suffered damage.

  Here's an example:

  • Let's pretend that an earthquake reduces 10 units to rumble, and the remaining 66 units are unaffected.
  • For the purposes of this example, let's assume that the total damage is $6,250,000.00.
  • The HOA's 20% deductible would be $1,250,000.00.
  • That deductible would be assessed against all 76 Owners (even those without any damage) as:
    
    

    Unit Type	Amount
    A	$981.46
    B	$1,500.52
    C	$1,576.77
    D	$1,582.40
    E	$966.56

  As such, the California Earthquake Authority offer Owners the opportunity to purchase special coverage to cover the cost of such an assessment.

• It is always advisable for each Owner to have what is called HO-6 policy. The insurance provider studies the Association's policy and determines the extent of coverage the Owner should have.

Fire

In the event of a fire, here are some things to consider:

• The Crown Harbor condominium complex is based on a townhouse architecture — one unit is next to and/or immediately above another. So a fire in one Unit can quickly spread to another. In the event of a fire, the Association's fire insurance should cover the repair of the structure and the damage to the Unit with one important caveat. The Association policy only covers replacement of these items as per the original building specifications.

  Here's a simple example:

  If an Owner has expensive granite countertops, the Association policy will only cover installation of tile to match what was present when the Unit was originally built.

  Owners should consider additional fire insurance of their own if they have a concern.

• Just like for earthquake insurance, it is always advisable for each Owner to have what is called HO-6 policy. The insurance provider studies the Association's policy and determines the extent of coverage the Owner should have.

Water

In the event of water damage, how claims are processed depends on the source of the water:

• If damage to a Unit is the result of a roof or siding leak, the Association is responsible. If the leak is the result of a storm, the Association's insurance is contacted to request coverage. If the leak is the result of lack of properly maintained roof or siding, the Association covers the repair.

• If damage to a Unit is the result of a toilet backup, and the blockage is in the Association-owned sewer lateral, then the Association covers the repair. If the blockage is in the plumbing for the Unit, then the Owner covers the repair.

• If damage to a Unit is the result of water from another Unit, such as a leaking hot water heater, the insurance for the Owner where the leak originated is contacted to request coverage.

• If damage to a Unit is the result of a window, door, or skylight leak, such as an improperly sealed window, the Unit owner is responsible for the repair. This includes the repair of Association siding that was damaged by the Owner's window, door, or skylight.

In dealing with leaks, sometimes a water test is necessary to determine the source. A water test can cost up to $500. Based on the results of the test, if the leak is covered by the Association, then the cost of the water test is paid by the Association. If the leak is Owner responsibility, then the Association seeks reimbursement for the cost of the water test from the Owner.

A similar policy applies when it comes to tarping of a unit. Tarping provides an immediate remedy to water intrusion into a unit from rain. If the source of the intrusion is the responsibility of the Association (e.g., siding), then the Association pays for the cost of tarping. If the source of the water intrusion is the responsibility of the Owner (e.g., window), then the Association seeks reimbursement for the cost of the tarping from the Owner.