The following is added:

1. We insure for direct physical loss to property covered under Section I caused by earthquake, including land shock waves or tremors before, during or after a volcanic eruption.

One or more earthquake shocks that occur within a 72-hour period constitute a single earthquake.

2. This coverage does not increase the limits of liability stated in this Policy.

B. Section I – Exclusions

1. The following exclusions are added:

a. Exterior Masonry Veneer

We do not cover loss to exterior masonry veneer caused by earthquake. The  value of exterior masonry veneer will be deducted before applying the  earthquake deductible described above. For the purpose of this exclusion, stucco is not considered masonry veneer.

b. Flood

We do not cover loss resulting directly or indirectly from flood of any nature or waves, including tidal wave and tsunami, whether:

(1) Caused by;

(2) Resulting from;

(3) Contributed to by; or

(4) Aggravated by;

earthquake.

c. Filling Land

This coverage does not include the cost of filling land.

2. Exception To The Earth Movement Exclusion 

The Section I – Earth Movement Exclusion does not apply to loss caused by earthquake, including land shock waves or tremors before, during or after a volcanic eruption.

Analysis

The coverage is straightforward. Direct physical property damage caused by earthquake, including land shock waves before, during or after a volcanic eruption are covered. One or more earthquake shocks that occur within a 72-hour period is considered one earthquake. This is similar to the parameters for a volcanic eruption period found on the HO 00 03. Note that this endorsement does not increase the limits found on the policy; it simply adds earthquake as a covered peril.

Exclusions exist for damage to exterior masonry veneer. The value of any damaged masonry veneer will be deducted before the earthquake deductible is applied to the loss. Stucco is not considered masonry veneer. This exclusion may be removed by checking the box in the schedule.

Flood is excluded as well, and this includes loss resulting directly or indirectly from flood of any nature or waves, including tidal waves and tsunamis, whether caused by, resulting from, contributed to by, or aggravated by an earthquake. Earthquakes may happen under the ocean – tidal waves or tsunamis could be triggered, and while this endorsement covers damage from earthquake, any resultant damage from flood or tidal waves, even if caused by an earthquake, is excluded.

The cost of land to fill gaps in the dirt caused by an earthquake is not covered. Coverage is specifically for the structures and property itself, and not the land underneath.

While the form is designed to provide coverage for earthquakes, in an abundance of caution it specifically states that the Earth Movement Exclusion found in Section I does not apply, including to land shock waves or tremors before, during or after a volcanic eruption.

Note that there is no definition of earthquake, nor is there any specification that the earthquake must be caused by natural forces and not manmade. Merriam-Webster Online defines earthquake as: "a shaking or trembling of the earth that is volcanic or tectonic in origin". Hydraulic fracking is a known cause of earthquakes but it is not mentioned, nor is there any other reference to manmade cause of earthquakes. The process of fracking involves the injection of fluid into the ground in order to break up the rock and let oil or gas escape. The wastewater is also injected into the ground in deep wells, and these disposal wells have been known to cause earthquakes. Since the injection of wastewater can cause the ground to move, an argument could be made that the resultant earthquake was caused by tectonic activity. Certain company specific earthquake endorsements specifically exclude earthquakes that result from manmade activity.

C. Section I – Conditions

B. Deductible

The following replaces any other deductible provision in this Policy with respect to any one loss covered under this endorsement:

1. We will pay only that part of the total of all loss payable under all Section I – Property Coverages, except:

a. Coverage D; and

b. The Additional Coverages;

that exceeds the earthquake deductible described in Paragraph B.2.

2. The dollar amount of the earthquake deductible is determined by multiplying either the:

a. Coverage A; or

b. Coverage C;

Limit Of Liability shown in the Declarations, whichever is greater, by the deductible percentage amount shown in the Schedule above.

The total deductible amount will not be less than $500.

All other provisions of this Policy apply.

Analysis

The form delineates the replacement of the standard deductible provision in the form with the deductible provision here. The deductible provision in this endorsement replaces the standard provision for all coverages except Coverage D and the Additional Coverages. Coverage D is Loss of Use, and the Additional Coverages include Debris Removal, Reasonable Repairs, Trees, Shrubs and other Plants, Fire Department Service Charges, Property Removed, Loss Assessment, Collapse, Glass or Safety Glazing Material, Landlord's Furnishings, Ordinance or Law, and Grave Markers. The deductible amount must be met before coverage is paid.

To calculate the dollar amount of the earthquake deductible, either the Coverage A or Coverage C limit shown in the dec, whichever is greater, must be multiplied by the deductible percentage amount shown in the schedule. The total deductible will not be less than $500.

As always, the form states that all other provisions of the policy apply, indicating that the endorsement changes only specific parts of the policy. Everything else in the policy remains the same.

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