Earthquake Insurance in BC - Reliance Insurance Agencies Ltd.

The Juan de Fuca plate is the most volatile fault line in Canada. What are the implications for an earthquake in BC?

Did you feel the 5.1 magnitude earthquake off Tofino, BC on July 22, 2020? And in 2012 a 7.7 magnitude quake shook off Haida Gwaii. But the strongest earthquake recorded in Canada since the 1700’s was in 1949 when a 8.0 shaker occurred, also in Haida Gwaii. That earthquake was felt as far away as Prince Rupert.

You may be surprised to know that over 5000 earthquakes are recorded in Canada each year. In BC we are at risk for what is known as “The Big One or Megathrust”. This relates to the belief that there is potential for an earth-shaking event of considerable magnitude that will cause serious damage, injuries, and fatalities. Vancouver Island, the West Coast of BC and Metro Vancouver are all high-risk areas. Now is the time to review your home or business insurance policy and determine if buying earthquake insurance is in your best interest.

Should I purchase earthquake insurance?

The home insurance specialists at Reliance Insurance do not have a crystal ball, but we have the knowledge and a wealth of resources to help you make the best decision for your personal situation regarding the expenditure of earthquake insurance. We do this by conducting a risk assessment. The first thing is to understand the risk and determine a cost-benefit analysis. In 2019, CTV reported that the City of Vancouver released a map showing areas that would see the most severe damage during a significant earthquake. This is a just a guideline but shows specific hotspots.

What are the implications of an earthquake for the province of BC?

The province of BC is due for another subduction zone earthquake but we don’t know when it will happen. There are approximately 2500 tremors in BC every year, thus making this region highly seismic. Low-level intensity quakes – magnitude 4.0 in the Richter Scale or lower – usually go unnoticed. But BC is at risk for a megaquake because the Juan de Fuca plate is Canada’s most volatile fault line. It is a subduction zone, where one plate is being pushed under another. Earthquakes over 7.0 magnitude can cause serious damage. To put it in perspective a 7.0 earthquake has enough energy to heat New York City for a year*.

How do earthquakes cause damage?

It is not only the magnitude (energy release) of an earthquake, but the duration is also a key factor in how much damage occurs during and after an earthquake. Most damage is caused by ground shaking and a catastrophic magnitude may result in significant property damage, not to mention injuries and loss of life. Another risk, is the after shocks. We recommend to educate yourself on what to do immediately following the initial shakes.

Things to consider

Over the past 10,000 years, there have been about 40+ megathrust earthquakes on the planet.
Magnitude 8 or greater usually occurs every 240 years
Chile experienced a magnitude 8.8 in 2010 which lasted about 3 minutes
In 2011, Japan off the Pacific Coast had a 6-minute magnitude 9.1 earthquake
The last massive earthquake that shook the south coast of British Columbia, occurred in the 1700’s registering at 9.0

Based on these statistics, we are due for a big rumble in British Columbia.

Earthquake education to understand risk

Reliance Insurance staff have participated in a learning session conducted by Charles Taylor Adjusting, a worldwide company that has extensive experience handling insurance claims resulting from extreme natural disaster events. Their team of adjusters has responded to every major storm in recent history, including Superstorm Sandy (2012), 6.2 Earthquake in Italy (2016), and most recently 7.2 Earthquake in Mexico City (2017).

The following is from the presentation conducted by Eric Renteria, CIP:
British Columbia is peculiar because we live in a region called Cascadian which contains the 3 different types of tectonic plate’s boundaries along the Juan de Fuca and North American Fault.

Stress is building up

The Cascadia Subduction Zone (CSZ) is a 1000 km fault that runs from Northern Vancouver Island to Northern California. The fault itself is a boundary between two tectonic plates: the Juan de Fuca tectonic plate is moving towards and getting shoved under the North American plate.

When’s the next slow slip?

In a CBC documentary by Seismologist Johanna Wagstaffe entitled “Why the risk of the ‘Big One’ in BC is heightened every 14 months”, experts agree that, “Every 14 months or so (almost like clockwork), there is a sudden reversal of movement [of Vancouver island] for a couple of weeks. The plate is buckling in one direction when suddenly it settles a little bit … that little bit of extra stress triggers a rupture, which in turn causes the megathrust earthquake” (1) that is what seismologists call a “slow slip”.

Developing a risk strategy for earthquake insurance coverage

Many people in Canada are under the impression that the government will cover damages for catastrophic events. But that is not the case. According to BC Disaster Financial Assistance, “Insurable damages in the private sector from wildfires, earthquakes, snow load, wind storms, sewer or sump pit back-up, water entry from above ground (including roofs, windows or other areas of the building), are NOT eligible for DFA.” Should your home be damaged or destroyed, you will be bear the loss. Insurance is about protecting your financial investment in your personal property. By not having earthquake coverage you are at risk of losing everything or sustaining damages to your property that you can not afford to repair if your home is damaged by an earthquake.

Take stock of your risk ratio before buying earthquake insurance

1. Size up your risk. In BC we know what areas are most at risk for shake and water damage. Determine the risk associated directly with the type of home you are in: low-rise vs. high rise; concrete or wood; type of soil the structure is built on.

2. Assess the damage or replacement cost. The higher your risk, the more expensive the insurance. Determine if you would want to rebuild with guaranteed replacement cost or if you will want to take a cash settlement. Also, earthquake deductibles are a percentage of your home value. There are policies available to reduce your earthquake deductible. Talk to your Reliance broker about this option.

3. Mitigate the damage before the big one. Take steps to strengthen your house or home against earthquakes by reducing the likelihood of structural damage. In addition, inspect the inside of your home and determine what can be done to reduce internal damage to contents and the interior finishes.

4. Read the fine print. Review with your Reliance Insurance Agent what the policy covers. Be aware that damage that occurs after an earthquake such as a fire from broken gas lines may be covered by the standard homeowner’s policy.

5. Peace of mind. None of us know when the big one will hit, so having earthquake insurance is worth it for the peace of mind, that if the catastrophic event happens, you will be able to recoup.

Are you prepared?

During a major catastrophic event such as an earthquake, entire communities will be shut down. Make sure you have your emergency preparedness plan and enough food and water to survive for 72 hours. And knowing that you have good earthquake insurance coverage will make it easier to get through the shock and recovery of an earthquake event.

Reliance Insurance Advisors are ready to help you with your risk assessment. Call us today at 604.255.4616.