Hi Mary,

The issue at hand has to do with water heaters falling over and causing property damage, injury or loss of life to the tenant. If the legislation passes and they are required to retrofit the water heaters in rental units, then the tenants would have the ability to sue to owner for their losses. Today the matter would be considered an "Act of God" and the tenant would have to suffer the loss and not be financially compensated for their losses.

Earthquake insurers do not require that a water heater be retrofitted. Some homeowners insurers require the retrofitting before any policy is issued, however, most people will say the water heaters are retrofitted when they are in fact not. The only time the insurer will become aware of this is if a home is inspected. The majority are not.

The point is to put some teeth into the law so those who should act responsibly will do so. The way I see it is, if the legislation passes, the immediate reaction from the insurance community will be to exclude liability coverage to the unitowner if they do not strap the water heater. For the unitowner, that means its right out of their pocketbook. I think that should be sufficient to be a good wake up call to most of them.

Frankly, I doubt most unitowners think much about earthquakes anyway, so hazard awareness and punitive liability aren't likely to be at the top of their list of things to keep current with.

Petra