Earthquake
Defined A sudden movement of the earth’s crust caused by the release of stress accumulated along geologic faults or by volcanic activity. A sudden release of energy in the earth’s crust or upper mantle, usually caused by movement along a fault plane or by volcanic activity...
Defined A series of vibrations induced in the earth’s crust by the abrupt rupture and rebound of rocks in which elastic strain has been slowly accumulating. A sudden movement of the Earth’s lithosphere (it’s crust and upper mantle)... -thefreedictionary.com
Measuring Intensity Magnitude Earthquake Effects Estimated Number Each Year 2.5 or less Usually not felt, but can be recorded by seismograph. 900,000 2.5 to 5.4 Often felt, but only causes minor damage. 30,000 5.5 to 6.0 Slight damage to buildings and other structures. 500 6.1 to 6.9 May cause a lot of damage in very populated areas. 100 7.0 to 7.9 Major earthquake. Serious damage. 20 8.0 or greater Great earthquake. Can totally destroy communities near the epicenter. One every 5 to 10 years
Earthquake Frequency
Earthquake Severity
Shaky Places To Live
ALASKA
HAWAI’I
SAN FRANCISCO
NEW MADRID
VOLCANO
Emerging / Other Areas
Oklahoma November 5, 2011 – 5.6 magnitude Shawnee / Sparks 2 injured 14 homes destroyed Highway 62 buckled
Why Do We Care? Property policies don’t cover earth movement!!! Commercial Property Exclusions Homeowner’s Exclusions
ISO 2012 Commercial Property Policy
Commercial Property Exclusions Earthquake and related events
Commercial Property Exclusions Earthquake and related events Landslide
Commercial Property Exclusions Earthquake and related events Landslide Mine subsidence
Commercial Property Exclusions Sinking, rising or shifting
Commercial Property Exclusions Sinking, rising or shifting Ensuing fire or explosion IS covered
2011 ISO Homeowners Policy
Homeowner’s Exclusions Earthquake and related events
Homeowner’s Exclusions Earthquake and related events Landslide, mudslide, and mudflow
Homeowner’s Exclusions Earthquake and related events Landslide, mudslide, and mudflow Subsidence or sinkhole
Homeowner’s Exclusions Anything else we forgot
Homeowner’s Exclusions Anything else we forgot Concurrent causation exclusion
Homeowner’s Exclusions Anything else we forgot Concurrent causation exclusion Ensuing loss by fire, explosion, or theft IS covered
Underwriting Concerns Brick or concrete built before 1940 Loss assessment coverage unless the master policy covers it Magnitude 5.0 Veneer coverage Location, location, location
Deductibles Commonly MUCH higher than the property deductible for other losses. Percentage of value, not loss Commercial deductibles can apply per building or per item
Commercial Property Endorsement
Commercial Property Endorsement Earthquake
Commercial Property Endorsement Earthquake Volcanic eruption
Commercial Property Endorsement Earthquake Volcanic eruption 168 hour period (7 days)
Commercial Property Endorsement Sprinkler leakage from earthquake
Commercial Property Endorsement Sprinkler leakage from earthquake Sprinkler leakage from volcanic eruption
Commercial Property Endorsement Sprinkler leakage from earthquake Sprinkler leakage from volcanic eruption Policy expiration does not reduce the 168 hour period
Provisions Earth movement exclusion does not apply to earthquake
Provisions Earth movement exclusion does not apply to earthquake Collapse is covered for earthquake and volcanic eruption
Deductible Issues Deductible applies per item, not per loss
Deductible Issues Deductible applies per item, not per loss Policy valuation provisions apply
Deductible Issues Specific insurance for reporting form Blanket insurance Builder’s risk
Homeowner’s Endorsement
Homeowner’s Endorsement Earthquake
Homeowner’s Endorsement Earthquake Volcanic eruption
Homeowner’s Endorsement Earthquake Volcanic eruption 72 hour period (3 days)
Homeowner’s Endorsement Earthquake Volcanic eruption 72 hour period (3 days) Does not increase limits
Typical Limitations
Typical Limitations No other structures coverage
Typical Limitations No Coverage B Percentage Deductible
Typical Limitations No Coverage B Percentage Deductible ACV loss settlement
Typical Limitations No Coverage B Percentage Deductible ACV loss settlement Exterior masonry veneer inclusion or exclusion
Exclusions
Exclusions Flood
Exclusions Flood Filling land
Concurrent Causation Flood Filling land Tidal wave and Tsunami
Points To Remember The Earth Movement exclusion is not deleted. WE ONLY GIVE BACK EARTHQUAKE!!! Loss Assessment Other concurrent loss issues...
Points To Remember Sinkhole collapse is STILL not covered by the homeowner’s form Theft IS a covered ensuing loss on the homeowner’s form Coinsurance issues Alternate form issues
Earthquake