Property · Insurance Term
Earthquake Coverage
Definition
Earthquake coverage pays for damage caused by the ground shaking in an earthquake, which standard commercial property policies exclude. It is usually added by endorsement or bought as a separate policy, often with a percentage deductible and its own limit.
In Plain English
Most property forms exclude earth movement, which commonly includes earthquakes, landslides and earth sinking or shifting. Standard forms treat sinkhole collapse separately, so check your wording. Earthquake coverage adds back protection for shaking damage. Fire that follows an earthquake is often covered by the main policy anyway, but the wording varies.
Earthquake coverage commonly carries a percentage deductible based on building value, and some policies sublimit it. Larger owners often buy it through a difference in conditions policy that bundles earthquake with flood.
Earthquake coverage doesn't cover flooding, even if a quake causes it; that takes flood insurance. It also usually doesn't cover gradual settling or foundation movement.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: A warehouse insured for $5 million has earthquake coverage with a 5% deductible. A quake causes $400,000 of cracking and racking damage. The deductible is $250,000, so the policy may pay about $150,000.
What to Watch For
- Check whether your property policy excludes earth movement and whether earthquake was added back.
- Ask how the earthquake deductible is calculated, such as per building or per location.
- Ask how sinkholes and ground settling are treated, since settling is often excluded.
- Check lender or investor requirements, as some portfolios must carry earthquake coverage.
Last updated October 14, 2026 · Primesure editorial team · How We Write