Ask Sonnet: How does earthquake coverage work?

If you live on the coast of British Columbia or near the St. Lawrence and Ottawa River valleys, you’ve probably felt your fair share of earthquake tremors over the years. Adding earthquake coverage to your home insurance policy when you’re in a high-risk area is definitely worth considering – but we’ll be the first to admit that it’s one of those coverages that’s a bit tricky to understand.
 
We’ve tried to make it as clear as possible (and just so you know, we’re going to be speaking from a Sonnet coverage perspective. Other coverage may be slightly different, but this will give you a good idea of how it works.

First things first – what is earthquake coverage?

Earthquake coverage covers loss or damage to your home and personal belongings caused by tremors or shaking from an earthquake. It doesn’t, however, cover loss or damage caused by flood or tsunamis that are triggered by an earthquake. 

Let’s break it down…

The first thing you need to know is that there are separate coverage limits for your house, your belongings, any detached structures (a shed or a detached garage for example) and extra expenses you might have after a loss. Extra expenses might include moving/temporary living expenses or what it might cost to rent your entire house based on fair market value. There’s also something called a “house limit,” which is what we estimate it would cost to replace your current. Confused? Stay with us – we’ll show you how this all comes together… 

Next - deductibles.

With Sonnet earthquake coverage, you can choose either a 5%, 10% or 15% deductible which would apply to your house, personal belongings and detached structures. There’s no deductible for your extra expenses, so you’re able to get back on your feet without cost while your home is being repaired.
 

For example, if we estimate your home would cost $500,000 to replace and you chose a 10% deductible, here’s how it would look:

 Homeowner coverage

 Limit

Deductible – 10%

 House

 $500,000

 $50,000

 Other structures
 (Limit = 10% of your house limit)

 $50,000

 $5,000

 Personal belongings
 (Limit = 70% of your house limit)

$350,000

 $35,000


You might be wondering why the deductibles are so high. When an earthquake happens, it’s a large-scale event that affects almost every home in a wide area. These high deductibles mean that the majority of your loss (and everyone else’s) is covered while keeping your coverage affordable. Ultimately, it’s a lot less than what you’d pay if you didn’t have coverage.


Protect your home and the things you love most.