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Earthquake Insurance

Many people do not have a clear understanding of what Earthquake Insurance is, if they have it, if they need it or what it covers.  In British Columbia, where there is a higher probability of experiencing an earthquake, having earthquake insurance should be something that is seriously considered by all home owners.  

Check this seismic hazard map of BC from the Geological Survey of Canada.

Earthquake Insurance

What is Earthquake Insurance?

Earthquake Insurance purchased as additional coverage when you get your home insurance, condo insurance or tenant insurance.  This covers your for the repair of your home or replacement of your personal property if they are damaged in an earthquake. Earthquake Insurance also provides coverage if you’re unable to live in your home post-earthquake due to the damage caused. 

Who can purchase Earthquake Insurance?

To purchase earthquake insurance you must be a person with an existing home, condo or tenant insurance policy.  If you do not currently have one of these policies you can purchase earthquake insurance at the time you insure your home.  

What does Earthquake Insurance cover?

Earthquake Insurance covers you for the loss or damage caused by the quake or shaking from the seismic event.  It does not cover damage caused by a secondary event caused by the earthquake like a landslide, avalanche, tsunami or tidal wave.  

If your policy covered a home, you will be covered for the loss or damage of your building and the replacement of your contents.  The coverage will also take care of any additional expenses, to the limit the policy specifies, incurred while having to live away from your home. 

If your policy covered a condo, it is the strata corporations responsibility to insure the building and you can ask them if they are carrying earthquake insurance.  If the building is damaged by a quake and your contents are damaged, they will only be covered if you do have earthquake insurance,  your regular condo policy will not cover the damage or loss of your property.  As above, your earthquake policy will also cover additional expenses from having to live away from your home.

If you rent your home, the coverage will cover your property and additional living expenses. 

How much will it cost?

As with other insurance coverage, the cost is dependent on many things.  The amount of the policy, the deductible, and the area you live in can affect the cost.  The insurance could be as little as $50 a year or well into the hundreds of dollars. 

Who should buy Earthquake Insurance?

Contrary to popular belief, homeowners assume that government will compensate them for damage or earthquake coverage is included in their home insurance policy, which in fact it is not.

According to government statistics, there is a 5-15% chance that there will be a earthquake in the next 50 years in Canada. This type of coverage is worth buying because when the “big one” hits as everybody has been saying the last couple of years, you don’t want to be in the situation of  having lost everything and not being able to cover the expenses to get everything back to normal.

There are a lot of things you can do to prepare for an earthquake but the only way to actually financially protect yourself against earthquake damage is to actually buy earthquake insurance. 

Will my Insurance Company be able to 

Every year the number of earthquakes and other disasters like hurricanes, tornadoes, wild fires and tsunamis affect millions of people.  So how do insurance companies have the ability pay out all of the claims?

  • Insurance companies buy catastrophe protection from reinsurance companies. This helps spread the risk (and cost) of disasters globally.
  • Insurance companies are heavily regulated by both provincial and federal governments. 
  • Insurance companies are required to be members of the Property and Casualty Insurance Compensation Corporation. If an insurance company fails, PACICC will automatically respond to all valid claims for participating members. 

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