What it does
The Causes of Loss forms exclude earth movement. CP 10 40 adds Earthquake and Volcanic Eruption as Covered Causes of Loss for the property and coverages in its Schedule. All shocks or eruptions within any 168-hour period are one event. Alternatively, the Schedule can provide Earthquake – Sprinkler Leakage Only, which covers only sprinkler leakage resulting from earthquake or volcanic eruption, subject to the fire deductible.
Key provisions (02 19 edition)
- Collapse caused by earthquake is covered under this endorsement. The regular collapse additional coverage does not apply to it.
- Exclusions remain for tidal wave or tsunami, earthquakes that began before inception, and land restoration. Ordinance or law stays excluded unless separately endorsed.
- Exterior masonry veneer (except stucco) on wood-frame walls is not covered unless the "Including Masonry Veneer" option is chosen or veneer is less than 10% of the outside wall area.
- The percentage deductible applies to each earthquake and is calculated separately for each building, personal property at each building, and personal property in the open, based on value or limit as the endorsement specifies.
Quoting and selling notes
- Get construction type, year built, retrofits and soil information. Earthquake pricing and capacity depend on them.
- Show the client the deductible in dollars. A 10% deductible on a $3 million building is $300,000.
- Related forms include the sub-limit version (CP 10 45), the flat-dollar deductible versions (CP 10 28, CP 10 29), the inception extension (CP 10 41) and the schedule CP DS 06.
