It’s coming! Ya, right. They keep saying – it’s only a matter of time until the ‘big one hits‘ on the West Coast of BC. A lot of mortgage lenders may even require that you have earthquake coverage as part of your house insurance policy. There is sometimes some ambiguity about requirements and policy so we wanted to drop a few important pieces of info on you about earthquake insurance.
Of course, if this doesn’t answer your questions, please call us today.
What is covered under the Earthquake coverage?
Technically, earthquake insurance covers property loss or damage caused by the tremors or shaking from an earthquake. It does not include landslides, snow slides, tsunamis or tidal waves even if the tsunami was due to an earthquake. That’s the tricky part; the earthquake may have triggered a landslide or ocean surge, but none of the subsequent damage as a result of these events are covered. It pays to ask!
Is Earthquake automatically covered on my policy?
Earthquake coverage is an additional endorsement that is optional. A regular property insurance policy does not include this coverage.
For home insurance policies, when a customer receives a quote from a company with the Earthquake coverage it can include coverage on just the Dwelling/Outbuilding, or on the Dwelling/Outbuilding and Contents.
For Condo or Tenant insurance policies, you may purchase the Earthquake coverage on the contents only.
Is the Earthquake coverage expensive?
The Earthquake coverage expense can vary depending on the risk area that you live in. The higher the risk of an earthquake, the higher the rates.
Most companies add earthquake coverage with a deductible. This means in event of an earthquake you will pay a percentage to have your dwelling or contents replaced. The deductible amounts tend to be a lot higher than the standard policy deductible because they are less likely than other type of losses but when they happen can cause much more damage than other perils. Depending on where your home is companies offer varying deductible options from 5%, 8%,10% and 15% to help balance premiums.
How do I know if my insurer can pay out my claim?
The ability for insurance companies to pay out catastrophic claims resulting from earthquakes is no different than fire or other event that damages the home beyond repair.
Catastrophe Protection
Additionally, there is redundancy within the industry, referred to as catastrophe protection. Each insurance company is required to pay in to the Property and Casualty Insurance Compensation Corporation (PACICC). This is sort of like, insurance for the insurers. The PACICC is a non-profit organization which is funded by the industry to cover all claims in the event of a company collapse. This protects you so that an insurer who is in over their head, can’t just fold and relinquish all financial responsibility to their claim holders. The PACICC will step in and fund the outstanding claims.
All of our insurers are members of the PACICC, so you can rest assured, if an earthquake damages your home, you will be covered.
Learn more about this umbrella company here: http://www.pacicc.ca/
We have fully licensed and highly qualified insurance brokers ready to serve you7 days a week (including most statutory holidays), plus Wednesday, Thursday, and Friday we’re available by phone until 9pm.
