Recently, one of the editors came across an excellent video explaining the New Madrid fault. The fault line, or seismic zone as it is sometimes referred to, lies across parts of Missouri, Arkansas, Tennessee, Kentucky, and Illinois. Due to the nature of the underlying geology, an earthquake in this region can shake an area 20 times larger than earthquakes in California, and travel up to1,000 miles, depending on the size of the earthquake.
In light of that, we realized that we needed to look at the coverage available for earthquakes. There are multiple endorsements which include the following:
CP DS 06 02 19 Earthquake - Volcanic Eruption Coverage Schedule (Sub-Limit Form)
CP 10 28 02 19 Earthquake And Volcanic Eruption Coverage With Flat-Dollar Deductible
CP 10 29 02 19 Earthquake And Volcanic Eruption Coverage (Sub-Limit Form With Flat-Dollar Deductible)
The Earthquake and Volcanic Eruption Coverage with Percentage Deductible CP 10 40 02 19
CP 10 45 02 19 Earthquake And Volcanic Eruption Coverage Endorsement (Sub-Limit Form With Percentage Deductible)
CP 10 41 02 19 Earthquake Inception Extension
Endorsement CP 10 41 may be added to any of the earthquake and volcanic eruption endorsements, CP 10 28, CP 10 29, CP 10 40, or CP 10 45. This endorsement is used when simplified forms replace non-simplified forms when the non-simplified forms include earthquake coverage.
Exclusion D.6. is replaced by the following:
6. We will not pay for loss or damage caused by or resulting from any Earthquake or Volcanic Eruption that begins before the inception of this insurance.
But we will pay for loss or damage by Earthquake or Volcanic Eruption that occurs on or after the inception of this insurance, if the series of Earthquake shocks or Volcanic Eruptions began within72 hours prior to the inception of this insurance.
Analysis
The effect of this revision of D.6.is to clarify that no coverage applies to any earthquake or volcanic eruption damage that begins before the inception of the applicable endorsement adding this coverage, except if the earthquake or volcanic eruption began within 72 hours prior and continued into the inception of such coverage.
Includes copyrighted material of Insurance Services Office, Inc., with its permission.
Karen Sorrell, CPCU
Karen Sorrell, CPCU is an editor and insurance technical resource for FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Karen has an extensive background in commercial and specialty lines underwriting and product management spanning over 30 years. Her technical underwriting skills combined with her research and analysis skills in insurance product development are a winning combination for her role of insurance editor and in the area of insurance policy language interpretation for Arc Network.