Do I Need Earthquake Insurance?

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Some homeowners mistakenly believe that earthquake coverage is automatically included in their home insurance policy – this is most often not the case.  Earthquake insurance is typically purchased as an add-on to your existing coverage.

Other homeowner’s have expressed their belief that the government will step in and compensate them for damages in the event of a large earthquake.  The reality is that this is very unlikely.  Earthquakes are an insurable event and therefore it is considered the responsibility of the homeowner to protect their homes and belongings. The Disaster Financial Assistance (DFA) program states clearly that to be eligible for financial assistance, “the damage must be from an event that is uninsurable”. http://www.embc.gov.bc.ca/em/dfa_claims/dfa.html

Therefore homeowner’s need to individually assess their risk and make the decision whether or not to purchase earthquake insurance.  To help you decide, here are a few questions you can ask yourself:

  • Do I live in a high-risk area for earthquakes?
  • Is my home constructed to withstand an earthquake of moderate strength?
  • Do I have sufficient resources to repair or rebuild my home, and to replace my belongings?

If your answers to the questions above indicate that earthquake insurance would be a prudent purchase, please read on to learn what you can expect from this coverage.

What Earthquake Insurance Does and Does Not Cover

As with any purchase, it is important to understand exactly what you are buying.  Earthquake insurance is designed to cover damage to your home or property caused by the actual shaking of the earth.  It does not cover damage caused by landslides or tsunamis that may result from the earthquake.

  • If you own a house, earthquake insurance will typically provide coverage for damage to the building or your personal belongings. Additional living expenses will also be covered, if you’re unable to live in your home while it is being repaired.  A process that may take a significant amount of time.
  • If you own a condo, the strata corporation is responsible for insuring the building, but all your personal belongings must be covered by your own earthquake policy. Condo owners who purchase earthquake insurance also benefit from receiving additional living expenses if they are unable to live in their condo while it is being repaired.  In addition, you may be required to pay a portion of the strata corporation’s deductible – which will be very large for earthquake claims.  Again, your own earthquake insurance may provide you with coverage for this expense.
  • If you rent your home, it is also important to consider earthquake insurance to cover your personal belongings and any additional living expenses you may incur.

Protect Yourself

What else can homeowners do to protect themselves?

  • Have an earthquake readiness plan and make sure the whole family is familiar with it.
  • Prepare and keep an up-to-date emergency kit.
  • Know how to turn off your gas and water mains.
  • Learn about earthquake proofing your home, such as strapping the water heater to wall studs bolting bookcases to wall studs, and installing latches on cupboards.
  • Review your current insurance coverage to ensure you are adequately protected in the event of an emergency.  Call one our experienced insurance advisors today, we are happy to help you select the right coverage for your unique needs.

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