"On May 8, 1642, Maisonneuve embarked from St. Michael, and on the 17th his little flotilla, a pinnace, a flat-bottomed craft moved by sails, and two row-boats, approached Montreal, and all on board raised in unison a hymn of praise." - CanadaHistory.comMontreal is a city of culture, fun, adventure - definitely a place to shake things up and live the most out of life. Today we had a little shaking up of a different sort.
Automatic detection of seismic event: magnitude 4.8 - 17 May 9:43 EDT - BRAESIDE, ON region— Earthquakes Canada (@CANADAquakes) May 17, 2013
Does your residential policy provide you with Earthquake coverage?
The following article was produced in an earlier blog, however given the number of earthquakes in the Quebec - Ontario region, and our most recent earthquake of today, felt in Montreal, I thought the info might be fun to look at again, and help you if you're wondering what the risks are and if you're covered.
How Many Earthquakes Do You Think Happen Every Day?
You may not be in one of the zones highlighted on the map below, but earthquakes are shaking our world more and more each day. Do you need this coverage? Read more below...
Earthquake insurance is a coverage that people buy based on their own personal experience. In Canada, there are several hundred earthquakes with a magnitude 3.0 or less per year. At this magnitude, the effects are rarely more than "a low rumble heard".* Naturally, these have not been a concern for individuals.
Starting at 4-5 on the richter scale, people start to notice effects of earthquakes. According to Natural Resources Canada, the effects of earthquakes start to be noticable by humans on a larger scale - over 5.0, where vibrations start to be felt and the impact is enough to move light objects.
Does your home policy cover earthquake insurance?
It is essential to ask your broker or insurer this question. Most policies do not cover earthquake insurance on buidlings automatically, this coverage must be purchased as an additional coverage for additional fees.
I live in Canada, what are the risks?
Clients often ask me to tell them what they should do, based on my knowledge. Should they purchase earthquake insurance, given we hardly ever, if ever experience them ourselves first hand in this region. How do you decide? The only person who can assess if you should or should not buy earthquake coverage is you. It is your insurance, and your investment in your home that you are seeking to protect. "But do you think I should buy it?". I always recommend, better safe than sorry - buy it to make sure you are protected. However, given our experiences living in Canada, and the fact that we rarely feel earthquakes, at times it is hard to say. I wish I had the answer, it is an individual choice, however, to help make the decision I can offer some facts.
Historically, in Eastern Canada, there have been records of ten earthquakes between 1663 and today measuring over 5.0 on the richter scale. In this range, one can expect anything from the movement of objects, to fallen chimneys and destruction of old buildings. In the 6.0-7.0 range rockfalls and landslides also become issues. Furthermore, as the intensity reaches closer to the 7 on the scale, tsunamis become risks if the epicentre is off shore.*
How much does it cost?
Earthquake insurance rates vary from insurer to insurer. Usually a higher deductible than your homeowner policy applies (somewhere around 5% of the value of your building is usually a starting point for the earthquake deductible on the building). I have seen rates as low as $50-$100 per year to as high as $1000+ per year. Remember, it depends on the value of what you are insuring.
I don't own a home, is Earthquake covered on my condo or tenant policy?
No. Earthquake insurance is not automatically covered on a condo or tenant policy. Some insurers may offer this, but most of them exclude the damages to your property caused by an earthquake. The rates of adding the coverage onto a tenant policy are usually significantly less than a homeowner policy. You could expect to have it for as little as $30 per year. Again, this is based on the amount of coverage you need, your region and the insurance company. Please note that the company who offers you the lowest price on your policy without earthquake, is not necessarily the one who will offer the lowest price when you include earthquake coverage. Have your broker check all the companies to make sure you are getting the best rate. I have seen comanies charge twice the price for the same home, simply because their earthquake rates are different. Always remember, the price goes up as your contents amounts go up.
For Condo's the coverage may be more expensive since you are insuring the additions and alterations to your unit as part of the coverage. I have seen it as low as $50 per year, but it can also range upwards of $200 per year, again depending on the location and other standard rating factors.
It would be essential for you to contact your insurer or broker for a quote, as well as a brief discusion to find out what is covered in all cases.
Don't leave yourself unprotected, learn about the facts, find out what is available from your broker or insurance company, then make an informed decision. Never assume you have the coverage, it is excluded on most policies in Canada, unless specifically added to the policy upon request.
For information on global earthquakes, visit:
- United States Geological Survey Earthquake Hazards Program
- Incorporated Research Institutions for Seismology Seismic Monitor
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