Are percentage deductibles on earthquake policies the norm? How do they work?

Deductible provisions in earthquake policies will vary from carrier to carrier, but yes, they are commonly expressed as a percentage. In these policies, the language will typically call for the percentage deductible to be applied separately to “each” affected building or structure. To clarify, the percentage deductible is not applied to the amount of the damage, but instead to the value of the structure damaged. Having the deductible applied separately is actually a valuable approach.

For example, let’s look at a project consisting of four 10-unit buildings. If only two buildings are damaged, the deductible is only applied to the value of those two buildings, instead of being applied to the value of the entire project.

2018-05-25T17:28:49-07:00