Earthquake Insurance and Managing Risk

January 2017

Earthquake insurance is common in California. For obvious reasons, it is not common in Ontario.

Yet there have been periodic tremors which can cause damage to condominiums. In 2012, an earthquake in Maine was felt in Canada, New York and New Jersey. A Boston earthquake in 1755 knocked down roofs. Were such an earthquake to occur today in Toronto, tremors could damage high-rise condo buildings.

When it comes to insurance the focus is on flooding, water and fire damage.

Earthquake coverage is likely viewed as unnecessary. Should an earthquake occur, many policies would not cover earthquake-induced damage.

When insurance coverage is considered, optional coverages can be important including water or flooding and certain liability coverage. Directors and Officers insurance is likely to fall into this category. When these coverages are not purchased the corporation has chosen to self-insure, possibly to reduce insurance premiums. The risk is costly expenditures should uncovered incidents occur.

Each condominium corporation must decide the best way to control its costs while managing risk, deductibles and premiums.


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