What happens if a commercial property sustains earthquake damage under the standard deductible policy?

When a commercial property sustains earthquake damage under a standard deductible policy, it typically means that a percentage of the property’s value is deducted from claims before the insurer will pay out on any covered loss. This approach aligns with many insurance policies that specify a percentage deductible for particular types of losses, such as those caused by earthquakes.

This percentage deductible is often based on the total insured value of the property and ensures that the policyholder has a vested interest in the maintenance and safety of the property. By having a percentage deducted, it essentially reduces the financial burden on the insurer for small claims and encourages policyholders to take preventive measures against potential earthquakes so they are less likely to file for smaller amounts that merely affect the deductible.

In contrast, other options suggest either a total lack of coverage, limited coverage, or waiving the deductible, which do not align with the standard practices for earthquake damage in commercial property policies.