Earlier this month, the west coast of the United States was hit pretty hard by a series of high magnitude earthquakes. In only a few moments, earthquake damages can rack up millions of dollars for homeowners and businesses. Did you know you can actually get earthquake coverage added on to your existing insurance programs? Especially for earthquake-prone regions, having the peace of mind can be reason enough to spend a few extra dollars on this coverage.
According to the Insurance Bureau of Canada, earthquake insurance “covers the loss or damage caused to the property and its contents caused by the shaking of the earth.” Not only is your building included, but so are your contents that become damages as a result of the earthquake! Some companies only offer building coverage, so damaged contents would still be at risk (ie. a TV mounted to a wall comes off during an aftershock and is broken). If you have the contents coverage, it is replaced, but if you don’t, that content is not replaced until you spend the money to buy a new one.
Deductibles are typically 2% of the value insured. For example, if the insured replacement value on your home is $500,000 you could expect a deductible of $10,000 to apply in the event of a claim. This will vary, so be sure to check with your Insurance Broker to confirm how this applies in your situation.
We researched 5 of the top Insurance Companies for Earthquake Coverage quotes and here is what we found:
- For a mid-town Toronto 1940’s detached home with a replacement cost value of $525,000, adding Earthquake Coverage would add an extra 19% – 58% to the premium cost, depending on the insurance company.
- A York region 2 storey home less than 10 years old with a replacement cost value of $786,000 would add an extra 18 – 45% to the premium cost for adding earthquake coverage.
- For a rented home in west-end Toronto, the tenant has $50,000 contents insured on their Tenant Policy. Earthquake coverage would add an extra 3 – 10% because the coverage applies to contents only. If the limit was $100,000, the additional premium cost would increase.
So, what to do? Is the coverage worth the additional cost? It is really up to you to determine whether it is worth a few hundred dollars per year to protect and be able to rebuild your home in the event of a situation where an earth movement or earthquake cracks the foundation or does significant damage.
My recommendation is that you request a quote for Earthquake Coverage to determine the value point for you and your family. I believe it would be a very uncomfortable situation to be in if you had a home damaged by an earthquake that you had to repair on your own.
Speak with a Chris Case, a licensed insurance broker at Case Insurance to learn your options.