Insurance companies will allow insureds to purchase additional coverages
, known as endorsements, to add coverages back to a policy that would otherwise have been excluded. Adding the earthquake endorsement to a homeowners or commercial property policy gives coverage back to insureds for losses resulting from an earthquake. The endorsement (CP10401012) will also give coverage for any shocks or tremors that occur within a certain specified time period. If an insured has this endorsement on their policy, they will be subject to a deductible as is common with many other causes of loss. Instead of having a specified dollar amount for the deductible, it is common to have a deductible percentage. For example, if you have a deductible of 15% and your home has a coverage limit of $100,000, the total loss would be subject to a $15,000 deductible. While this deductible might seem extremely high, it is certainly much better than being left with no coverage and having to pay $100,000 out of pocket to rebuild your home. It is also important to note how the deductible applies may vary by company and policy type.
The cost to add an earthquake endorsement is competitive for the coverage that is provided. For example, an insured could pay as little as $60 per year for EQ coverage on a $200,000 home in a low EQ Zone. It is encouraged that you contact your local agent to determine eligibility and pricing for this coverage. Please note factors that can effect eligibility include: type of building construction, number of stories, age of building, earthquake zone, and current earthquake activity in the area, etc. Please contact your local insurance agent today for more details!
Source: Insurance Services Office, Inc. Commercial Property Forms. (CP 00 99 10 12 & CP 10 40 10 12). Homeowners Forms. (HO 00 03 05 11 & HO 04 54 05 11).