If an earthquake happens tomorrow (knock on wood) and your house is damaged by the shaking and quaking, who do you think covers the cost of the damage?
If you’re like the 56 per cent of Canadians polled in a recent survey by Square One — a Vancouver-based insurance company — you might think the government is footing the bill. Wrong. Unless you have earthquake coverage on your home insurance policy, the cost is coming out of your pocket.
“A majority wrongly believes the government will provide financial assistance for earthquake damage,” said Daniel Mirkovic, president of Square One, in a press release about the survey. “There are some misconceptions that need to be addressed.”
Because damage due to earthquake is insurable — unlike other disasters such as overland flooding — homeowners and renters are not eligible for help from the government. So… should you get shaken up about an earthquake insurance policy?
Also read: Insurance Lessons Learned From the Calgary Floods>
Is Earthquake Coverage Worth It?Many Canadian homeowners and renters may eschew earthquake damage coverage, assuming the chances of a damage-inflicting quake occurring are low.
A 2013 study commissioned by the Insurance Bureau of Canada (IBC) found that in two of Canada’s earthquake “hot spots” — in British Columbia, off the west coast of Vancouver, and in Quebec, starting beneath the St. Lawrence River — 55 per cent (B.C) and 96 per cent (Quebec) had no earthquake insurance.
Just how likely is an earthquake to occur? More likely than you may think. According to Natural Resources Canada, there were 195 earthquakes across the country between August 1 and 25 of this year alone. It’s not just residents of Quebec and B.C. that need to be concerned; 18 per cent of the 195 Canadian earthquakes between August 1 and 25 occurred somewhere other than the west coast.
How Much Does Earthquake Insurance Cost?The cost of adding earthquake coverage to your existing home insurance policy varies across the country and depends on both the limit and deductible selected. Your home’s location is important; the price is higher in higher risk areas. Square One offers the following annual premium estimates for earthquake insurance in various Canadian cities, based on a $300,000 house and its contents.
- Toronto, ON: $15
- Winnipeg, MB: $25
- Montreal, QC: $178
- Edmonton, AB: $284
- Halifax, NS: $313
- Vancouver, BC: $332
- Richmond, BC: $515