Now knowing these statistics, this may be the perfect time to review your insurance policy to see if it includes earthquake insurance. It is interesting to note that earthquake coverage typically does not form part of most standard home insurance policies. It can however be purchased separately, assuming your property is eligible for the coverage. It will carry with it an additional premium amount and is always subject to a higher (separate) deductible than coverage for other perils included in your policy.

In recent years, we’ve seen the cost of earthquake insurance rise globally and here in BC. This is partly due to the rise in natural disasters, the impact from climate change and the general spike in the cost of living.

Rising costs are something we all need to consider but getting the proper coverage if an earthquake strikes, should be an important decision as a homeowner. It is important to do your research to understand if your property is at risk, based on the location of your property and the infrastructure it is built on.

As we have seen in similar disasters in other parts of the world, earthquakes can leave entire cities paralyzed and many homes destroyed. In the next few sections, we will take a closer look at earthquake coverage, how much it roughly costs to purchase, and whether it is worth purchasing for your home or condo.

In its simplest description, Earthquake insurance covers the loss or damage caused to a property as well as its contents, because of the shaking of the earth. In most policies, if the shaking of the earth results in a fire, only the resulting loss or damage from the fire would be covered under an ordinary home insurance policy. However, if your home is damaged because of the earth-shaking, not a fire, your standard home insurance policy would not cover the resulting damage unless you have purchased the earthquake coverage add-on.

It is true that earthquakes do not occur as frequently as other natural disasters. While that may be true, earthquakes can cause disastrous damage to homes, possessions, and other buildings. They can happen at any time and can leave people completely stranded, without any of their possessions or even a place to live. Having earthquake insurance provides you with peace of mind knowing that should a major quake hit the Lower Mainland, your home and your belongings are covered.

Over the years, the cost of earthquake coverage has increased substantially. Depending on the area of BC that you live in, the additional premium directly attributable to the earthquake can make up as much as 25-35% of your overall premium. Multiply that amount by the number of years you own your home or condo for, and you are paying a significant amount of money for something that may never happen in your lifetime. If the earthquake coverage component costs $300 a year to have and one lives in their home or condo for 40 years, that’s $12,000.

Purchasing any type of insurance requires all of us to look at the costs and benefits. While this cost may seem like a lot – especially at the moment with costs of living rising – if we didn’t have earthquake coverage and an earthquake hit, that could mean a total loss of a home. If we were to experience a disastrous earthquake in our lifetime, that $12,000 spent would be worth every penny and provide you with financial certainty during the most challenging time of your life. And, given that we do live in a part of the world that is prone to earthquakes—and experts telling us we’re overdue for ‘a big one’, it better to be safe than sorry and make an Earthquake Coverage part of your Residential Insurance policy.

Also as part of many earthquake policies, in certain circumstances, homeowners who are unable to return to their homes as a result of insurable damage may be entitled to additional living expenses. Earthquake coverage is also available for your place of business. In the event earthquake damage impedes your business operation, business interruption insurance can also be purchased.

At Leaders Insurance, our brokers are here to assist you with finding ways to manage your home insurance and find the best policy and rates for your needs. This includes investigating the costs and coverage for earthquake insurance. We look forward to continuing to support you in 2023 with all of your insurance goals. Contact Us today.

According to Canadian Underwriter, the type of materials that are used in strata builds have played a major role in the higher costs of insurance premiums.

As such, wood frames versus concrete are typically used in BC construction, and the high price of lumber has driven prices upwards. So much so that, Opta Information Intelligence pointed to a 400% increase in the cost of lumber between 2019 and mid-2021.

Ranging from fire to water damage, strata deductibles have been on the rise due to harmful weather conditions across the region, which includes significant fire and water damages.

Earthquakes across BC have also let to expensive re-builds, lending themselves to higher premiums.

With construction materials more in demand and costing more on the whole, rebuilding and repair costs could still bring higher rates, in terms of the amount of insurance coverage required to offset the costs the BC strata markets will face.

The reality is that with higher deductibles coming out of condo corporation budgets, premiums have had to also increase. As a result, many strata groups have acknowledged the need to shift towards more prevention methods. To help offset these both present a greater challenges when it comes to increased damage and in turn, higher claims.

Thankfully, there are signs that do have market experts pointing towards more stable strata fees in the new year.

With positive steps being taken toward preventative measures, this may also point towards a more favourable home insurance market, including the outlook for strata corps. in 2023.

In a major attempt to improve strata insurance fees, the Insurance Brokers Association of BC (IBABC) has made some recommendations that they feel will help to clarify any ‘grey’ areas when it comes to differentiating between the ‘insurance duties’ of unit owners and insurance corporation.

For starters, a $50 000 cap on loss assessment has been proposed, since as it stands, unit owners can be left with giant insurance bills that pose a major risk to their financial stability.

This is ultimately, one way that strata corps. feel they can lessen insurance deductibles moving forward.

The IBABC also suggests that all parties would benefit from a more comprehensive ‘standard unit’ definition within the BC Strata Property Act. The goal being that this would ensure units are being kept up to code, in terms of construction criteria, i.e. the walls, subfloor, electrical, plumbing, ceilings, etc.

Again, the idea being that this will help to distinguish between what is the responsibility of the owner and what is the responsibility the corporation when it comes to insurance payments.

IBABC goes on to add that these steps could mean that ‘millions of strata owners’ would be protected from the risk of losing their homes, because they simply can’t afford the rebuild or repair costs.

With these refinements on the horizon, it would seem there is hope for lower strata deductibles in the future – not a rise in high rises!

At Leaders Insurance, our brokers are here to assist you with finding ways to mange you home insurance. We look forward to continuing to support you in 2023 with all of your insurance goals.