How earthquake insurance works in Canada

While earthquake insurance is not mandatory in Canada, it is recommended as an add-on to a home, condo or tenant insurance policy if you live in an area at risk of seismic activity. 

According to a recent report from the Insurance Bureau of Canada (IBC), Canada experiences an average of 4,000 earthquakes each year. While most are minor, some could be strong enough to cause devastating damage across the country. Natural Resources Canada reports that British Columbia has a 30% chance of experiencing a major earthquake in the next 50 years. A magnitude-9 event could cause $128 billion in economic losses. Other provinces, such as Quebec, also face a high risk, with a smaller earthquake capable of causing tens of billions of dollars in damage. 

If you live in a high-risk area, you should consider earthquake insurance, especially if you cannot afford repair and replacement costs out of pocket. Many Canadians believe a standard home insurance policy covers earthquakes, but they are considered an uninsured peril. To secure coverage, you must add an earthquake insurance endorsement. 

The cost of earthquake insurance varies based on your risk, such as the size and location of your home. Square One Insurance, a Vancouver-based specialty home insurance provider, provided us with annual estimates for major cities across Canada for a $300,000 house and its contents:

• $15 in Toronto, ON
• $25 in Winnipeg, MB
• $178 in Montreal, QC
• $284 in Edmonton, AB
• $213 in Halifax, NS
• $332 in Vancouver, BC
• $515 in Richmond, BC

Note that earthquake insurance does not come with a standard flat-rate deductible. An earthquake insurance deductible is typically between 2% and 20% of the total damages. If you have a $300,000 house, expect to be out of pocket between $6,000 and $60,000. The deductible range will depend on your home's structure, age, and location.

Whether getting earthquake insurance is worth it depends heavily on where you’re located. If earthquakes are uncommon in your region, you may not need coverage. But, if you live in a Canadian earthquake zone, such as British Columbia or the Ottawa-Montreal-Quebec corridor, it may be worth it to add earthquake coverage to your home insurance policy. However, because not all providers offer this endorsement, you might need to consider an insurer that does.

Not all insurance providers offer earthquake insurance due to its risk and high claim payout. Below are some Canadian insurers who offer earthquake insurance: 

• Allstate Insurance
• Aviva Insurance
• BCAA
• Co-operators
• Economical Insurance
• Intact Insurance
• RBC Insurance
• RSA Insurance
• TD Insurance
• Travelers Insurance
• Wawanesa Insurance