In early 2013, both Economical Insurance and Family Insurance Solutions will stop offering earthquake insurance to home insurance customers living in parts of Metro Vancouver and southern Vancouver Island. Over the past 18 months, several other home insurance providers, including Aviva Canada, Intact Insurance and Wawanesa Insurance, have increased earthquake insurance rates and deductibles in BC. Several factors have prompted these changes, including:
- Earthquake risk models have been updated because of new geological mapping of earthquake fault lines and subduction zones along coastal BC;
- Damage and loss experience was worse than expected from the earthquakes that occurred in Japan, New Zealand and Chile over the past two years;
- More rigorous earthquake insurance guidelines, standards and requirements have been established by the Canadian regulators; and,
- Two powerful earthquakes occurred off coastal BC on October 28 and November 7, and measured 7.7 and 6.3 on the Richter scale, respectively.
"Clearly, many insurance providers are concerned about coastal BC's high earthquake risk," says Daniel Mirkovic, President & CEO, Square One Insurance. "It's not a matter of if, but when, an earthquake will hit. One way for providers to manage their risk is to limit the amount of earthquake coverage they offer. That means it may become increasingly difficult to get this much needed protection."
About 50% of BC residents buy earthquake insurance, which is most commonly sold as an add-on to home insurance policies. A few providers, like Square One, automatically include it in their base policies. If your provider no longer offers earthquake insurance, or if your earthquake rate or deductible has increased, the best thing you can do is shop around. The top two things you should consider when buying earthquake insurance are:
- What do you want to insure?
If you own a house, you can sometimes choose to insure just your building. While it may seem like a good way to reduce your premium, the reality is that the cost of replacing all your belongings can really add up. And if you own a condo, you should ensure you have enough protection for both your belongings and any assessment that may be made against you because of a shortfall in, or earthquake deductible for, your strata’s insurance.
- What deductible do you want?
You can typically choose from 2 or 3 earthquake deductibles. The higher the deductible you choose, the lower the premium you pay. While you may be tempted to choose the highest option available, you should keep in mind that earthquake deductibles are significantly higher than standard policy deductibles. That's because earthquakes occur less frequently than other types of losses, but when they do, they have the potential to cause significant damage to many homes.
All BC residents should take steps to prepare for an earthquake, exploring your earthquake insurance options should be one of those steps. To learn more about your earthquake insurance options, talk with your insurance provider or visitwww.squareoneinsurance.ca/earthquake-insurance.
Established in 2011 and based in Vancouver, British Columbia, Square One Insurance offers the only à-la-carte home insurance policy in Canada. That means you only pay for the protection you need. Square One is also one of the few providers to automatically include earthquake and broad water protection in its policy. No paying extra. For more information about Square One, or to get an online quote, visit www.squareoneinsurance.ca.
For more information, please contact:
Jason Vander Zalm
Square One Insurance Services Inc.
Tel: 778.331.6933 ext 103
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