What does the earthquake endorsement typically include?

The earthquake endorsement typically includes a standard percentage deductible as part of the coverage. This deductible is a specific percentage of the insured value of the property, which means that in the event of an earthquake-related claim, the policyholder is responsible for paying this percentage of the loss before the coverage kicks in. This type of deductible is common in earthquake insurance because it aligns the policyholder's risk with the insurance coverage available, encouraging responsible risk management.

The inclusion of a percentage deductible rather than a flat dollar amount reflects the assumption that the losses from earthquakes can vary significantly. By using a percentage, the deductible adjusts relative to the value of the property, helping to ensure that the policyholder has some financial stake in the claim process while also allowing for considerable coverage for significant losses.

Understanding this aspect of the earthquake endorsement is crucial for policyholders to adequately prepare for potential claims and to comprehend how their financial responsibility will be determined in the event of an earthquake.