Earthquake is excluded from every standard master policy. It is always a separate purchase.

Earthquake sits in a different category from wind, hail, or fire on a community-association property program, because it is not simply a peril with worse pricing in high-risk areas, it is a peril excluded outright from the standard commercial property form the master policy is built on. Unless a board has specifically purchased a separate earthquake policy or added an earthquake endorsement, an association's master policy responds to essentially nothing after a seismic event, regardless of how comprehensive the coverage looks for every other cause of loss.

This exposure concentrates most heavily in California, where seismic hazard runs through nearly every major population center, but the mechanic is the same everywhere the peril matters: earthquake is always an affirmative, separate purchase, never a default inclusion. A board that has never reviewed whether its program carries earthquake coverage should assume, until it confirms otherwise, that it does not.

The deductible is the real design decision, not the limit

Earthquake deductibles are structured differently from almost every other property deductible an association encounters. Rather than a flat dollar figure or the low single-digit percentages typical of a named-storm or hail deductible, earthquake deductibles are commonly set as a percentage of insured value that runs well into double digits, depending on the market, the building's construction and age, and its proximity to known fault lines. On an association with a large total insured value, that percentage can translate into a retention that runs into the millions of dollars before the policy pays a dollar.

That high deductible is not a flaw in the coverage, it is the structural feature that keeps earthquake coverage purchasable at all, since a single major seismic event can damage every insured building across an entire region simultaneously. For a board, the practical task is translating the percentage into a dollar figure and asking honestly whether the association could actually fund that retention through reserves or a special assessment, because a policy with a deductible the community cannot fund provides less real protection than the declarations page suggests.

Who actually requires it, and why most boards still have to decide for themselves

Earthquake coverage requirements are inconsistent across lenders, states, and governing documents, which is part of why so many associations end up without it by default rather than by decision. Some mortgage investors and lenders require earthquake coverage as a condition of financing for buildings in designated high-seismic-hazard zones, which can affect a unit owner's ability to sell or refinance if the association does not carry it. Separately, some governing documents or state statutes require the board to formally offer earthquake coverage to the membership for a vote on a regular cycle, even where carrying the coverage itself is not mandatory.

Because the requirement rarely comes from a single, obvious source, the safest approach for a board is to treat earthquake coverage as a decision that has to be made affirmatively, on the record, rather than one that resolves itself by default. Documenting that the board reviewed the exposure, obtained pricing, and either purchased coverage or declined it after disclosure to the membership is the standard practice that protects the board's own liability regardless of which way the decision goes.