Preparing for Disaster: Earthquake Insurance for your Home or Business

Marci • March 19, 2013

Preparing for disaster:  earthquake insurance for your home or business

 

With the devastating financial toll of the Feb 2011 earthquake in New Zealand predicted to reach $16-billion, many people in British Columbia are considering whether they should insure their homes and business against losses due to earthquakes.  And with good reason.

 

According to the Geological Survey of Canada, there is approximately a 10% chance that a subduction (oceanic plate) earthquake – similar in force as the catastrophic earthquake that killed over 300,000 people in the Southeast Asia – will occur off the coast of BC in the next 50 years.

 

There is a 12% chance that a crustal or shallow earthquake – similar to the Christchurch earthquake – would strike Vancouver in the next 50 years.  This type of earthquake could easily cause over $30-billion of structural damage to the city

 

Why should I have earthquake insurance?

 

A Habitat Insurance, we believe that the main objective of insurance is to protect you from a devastating loss from which you would find it difficult to financially recover.  A home or business is usually the most valuable asset that you will ever own.  So you must ask yourself,  “Could I easily recover without financial assistance if my home or business were damaged or destroyed by an earthquake?”  If the answer is no, you should seriously consider buying earthquake coverage.

 

Facts about earthquake insurance in BC

 

Earthquake insurance provides coverage for loss of or damage to personal property and buildings. It is optional coverage in all property insurance policies.

 

Earthquake rates are on the rise:  during the last 12 months, we have noted that many insurance companies have increased their premium rates and, with large losses such as those in New Zealand, this is a trend likely to continue.

 

If you own a detached home and have earthquake insurance, you will have coverage for the building and a certain percentage of coverage will be “built in” to the policy for personal property.  For example, a house valued at $500,000 replacement cost will be insured at $500,000 building cost with 80% ($400,000) for personal property.  (Depending on the insurance company, lower limits for personal property can be chosen. )

 

Insurance deductibles are always higher for losses due to earthquake.  Your house insurance or business policy may state $500 to $2,500 deductible for specific perils such as water damage.  Earthquake deductibles are typically stated as a percentage of the total loss.  So, if you have a 5% deductible on your $500,000 home, you will be responsible to pay the first $25,000.

 

A special note for condo owners about earthquake insurance

 

A condo owner policy provides coverage for your personal property, not the building.  (The building should have its own separate strata policy with earthquake coverage. )  You may also choose to add earthquake coverage to your condo policy.  We highly recommend that you do this, as your policy will can provide up to about $25,000for building earthquake deductibles coverage.

 

To illustrate the point more clearly, imagine this scenario:  your building is damaged/destroyed by an earthquake.  The condo owners will be responsible for paying the building earthquake insurance deductible.  A large strata building can be easily valued at $20,000,000; a total loss with a 10% deductible would result in a $2,000,000 earthquake deductible to pay.  If there is not enough money in the strata’s reserve fund, the remainder of the deductible to be paid will be divided between all of the condo owners.  If you have a condo owner’s policy with earthquake coverage, your insurance company will pay your portion of the deductible, up to the indicated policy limit.  If you don’t have earthquake coverage, your policy will likely pay no part of the earthquake deductible.

 

Condo policy limits can vary substantially for insurance deductible coverage.  Check with your broker about this important point.

 

How to pay less for earthquake coverage

 

Here are a few ways to reduce your premiums for earthquake coverage:

 

Location:   Premium rates for earthquake insurance in the Lower Mainland are highest for areas such as Richmond and parts of New Westminster, which would likely be most devastated by an earthquake.  You will pay lower rates elsewhere.

 

Deductible:   Ask for a higher earthquake deductible on your insurance policy.  For example, the standard earthquake deductible on your business or house insurance policy may be 5%.  You could opt instead for a 10% deductible.  Keep in mind that your deductible payment will also be much higher in the event of an earthquake claim.

 

Choose a lower personal property limit:   If you are home owner, some insurance companies will allow full value coverage for the building and a lower limit for personal property.  Ask your broker if this option is available.

 

 

 

If you have any questions about earthquake insurance for your home or business in British Columbia, or you would like a quote, please contact us:

 

Habitat Insurance Agencies, Ltd

 

Grace Catao – Managing Partner

 

Tel. 604-438-5241 / Cell 778-997-2583

 

Copyright © Habitat Insurance Agencies Ltd.   All rights reserved.

 

Disclaimer:  This article is designed to provide information for personal use only.  Please consult your professional insurance broker for further information. Habitat Insurance Agencies Ltd is not responsible for any legal disputes of this matter.

 

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Deposit vs. Down Payment: Key Differences for Homebuyers

By Marci Deane • July 29, 2026
When you’re buying a home, two terms often cause confusion: deposit and down payment . While they’re related, they serve very different purposes in the homebuying process. Here’s what you need to know. What Is a Deposit? A deposit is the money you provide when you make an offer on a property. Think of it as a show of good faith that proves you’re serious about purchasing. How it works : Typically, you provide a certified cheque or bank draft that your real estate brokerage holds in trust. If your offer is accepted, the deposit remains in trust until the deal moves forward. If negotiations fall through, the deposit is refunded. Connection to your down payment : Once the sale is finalized, your deposit becomes part of your total down payment. Why it matters : The amount is negotiable, but a larger deposit can make your offer more attractive in a competitive market. Keep in mind, however, that if you back out after conditions are removed, you risk losing your deposit. What Is a Down Payment? Your down payment is the amount you contribute toward the purchase price of your home when securing a mortgage. Minimum requirement : In Canada, the minimum down payment is 5% of the home’s purchase price. Anything less than 20% requires mortgage default insurance. Sources : Down payments can come from your savings, the sale of another property, RRSP withdrawals (through the Home Buyers’ Plan), a gift from family, or even borrowed funds. Example: How They Work Together Imagine you’re buying a $400,000 home with a 10% down payment ($40,000). When you make your offer, you provide a $10,000 deposit . Once conditions are met, that deposit is transferred to your lawyer’s trust account. At closing, you add the remaining $30,000 to complete your full down payment. The lender provides the rest—$360,000—through your mortgage. The Bottom Line Your deposit shows commitment and secures your offer, while your down payment is what makes the mortgage possible. Together, they work hand in hand to get you into your new home. 📞 If you’d like clarity on deposits, down payments, or any other part of the mortgage process, let’s connect. I’d be happy to walk you through it step by step.

RRSP Home Buyers’ Plan Explained: A Smart Way to Buy Your First Home

By Marci Deane • July 22, 2026
Saving for a down payment is one of the biggest challenges first-time buyers face. What many don’t realize is that the Canadian government offers a program designed to make it easier—the Home Buyers’ Plan (HBP) . This program allows you to withdraw money from your RRSP to help purchase your first home, without immediate tax consequences. Here’s how it works: Who Qualifies? To be eligible, you generally need to be a first-time home buyer. In practical terms, this means you must not have owned a home in the past four years, nor lived in a property owned by your spouse or partner during that time. There are also special allowances if you’re living with a disability or helping a relative with a disability. In these cases, you can use the HBP even if you’ve owned a home more recently. How Much Can You Withdraw? Under the program, you can access up to $35,000 from your RRSP as an individual. Couples can combine their withdrawals for a total of $70,000 . These funds must have been in your RRSP for at least 90 days before you take them out. Paying It Back The HBP isn’t “free money”—it’s an interest-free loan from your own retirement savings. You’ll have 15 years to repay the full amount back into your RRSP, starting in the second year after withdrawal. Each year, the CRA will send you an HBP Statement of Account outlining how much needs to be repaid. If you don’t make your repayment in a given year, that amount will be added to your taxable income. Why It’s a Smart Strategy The HBP can give first-time buyers a powerful boost toward homeownership. It helps you put together a larger down payment, which can reduce your mortgage amount and monthly payments. Just remember: it’s important to balance the short-term benefit of homeownership with the long-term impact on your retirement savings. Next Steps Thinking about using the Home Buyers’ Plan? Let’s sit down and review whether it’s the right move for you. Together, we can create a strategy that gets you into your first home while keeping your future financial goals on track. 📞 Reach out anytime—it would be a pleasure to guide you through the process.

Bank of Canada Holds Rate at 2.25% — July 15, 2026

By Marci Deane • July 15, 2026
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