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The option regarding loss or damage caused by earthquake is correct because many personal property policies exclude earthquake coverage by default. Therefore, policyholders often have the option to add this peril for an additional premium. This is a common practice in the insurance industry, as earthquakes can lead to significant damages that would not typically be covered under standard property policies.

Flood damage usually requires a separate flood insurance policy, as it is often excluded from standard home insurance policies. Theft damage can be included within the policy's coverage under certain conditions, eliminating the need for an extra premium in many cases. Damage from mold is often covered only under specific circumstances and typically is not added as a separate peril, but rather is related to other covered water damage issues.

By allowing the addition of earthquake coverage, insurers provide policyholders with the option to protect against a specific and potentially devastating risk, reflecting the variability in property insurance needs based on geographic locations and individual risk assessments.