Where to find it on your insurance document: Open your policy’s Summary of Coverages (some call it the Insuring Agreement or Declarations). In the Property section, find the row that starts Earthquake Annual Aggregate. The Deductible column shows the percentage and the minimum, for example 10% (minimum $100,000). The Limit column shows the most the insurer will pay in a year.
What does “10% (minimum $100,000)” mean?
It is the earthquake deductible. A deductible is the part of a claim that the strata pays before the insurer pays anything. For most losses it is a fixed dollar amount, such as $25,000 for water damage. Earthquake is different. A big quake could damage many buildings at once, so insurers set the deductible as a percentage of the insured value. The “minimum” is a floor, so a small building still has a meaningful deductible.
- The 10% is the percentage the insurer applies. It is set by the insurer when it prices the policy, and it is usually the same kind of percentage for the whole building.
- 10% of what? This is the important part, and the summary page does not say. It could be 10% of the insured value of everything on the policy, of the damaged building(s) only, or of the loss. The policy wording decides. Ask your broker or strata manager to show you the exact sentence. The calculator below lets you try all three.
- The $100,000 minimum only matters for smaller buildings. At 10%, the minimum is the bigger number only when the insured value is below $1,000,000. For a building insured for tens of millions, the percentage is far larger than $100,000 and the minimum does nothing.
- Where the insured value comes from. It comes from the building’s appraisal. The Summary of Coverages shows an Appraisal Date next to the Property heading. In the sample policy we looked at, the earthquake limit of $190,411,635 equals the property limit of $190,271,000 plus a $140,635 schedule of equipment, so it is the insured value of the whole building group.
If this, then that: what happens after an earthquake
Read it from the top. Each box is a question or a result.
A diagram like this helps because the real wording is hard to follow. It is simplified: actual claims also depend on the policy wording, other deductibles, the 150% extended replacement cost and the strata’s bylaws.
How to use it: type your numbers in the boxes (the examples are only there to show how it works) and the results update right away. Nothing is sent to us. Use Save my numbers to keep a copy on your own computer.
The other earthquake lines, in one place
- Earthquake Annual Aggregate (excluding 150% ERC): the most the insurer pays for all earthquake claims in one policy year, before the extra 150% cushion. “Aggregate” means a total for the year, not per event.
- 150% Extended Replacement Cost – Earthquake Annual Aggregate: extra room if the true cost to rebuild is higher than the insured value, for example after prices jump or the building code requires upgrades. It is shown as “Included.”
- Earthquake Annual Aggregate (including 150% ERC): the base limit plus the extra room, as one total number.
- Excess Property Extensions – excludes the peril of earthquake: extra room for the property extensions (such as lock and key and extra living expenses) that does not apply to earthquake damage.
See our guide to every line of a strata insurance summary for the rest.
What this tool does and does not include
- The starting numbers are examples only. Replace them with your own.
- Simplified estimates for a BC strata corporation. They leave out many real-life details such as your bylaws, the exact policy wording, lender conditions and GST.
- Rates and rules change. Confirm them with the firm or the government before you act.
- Information only. This is not tax, accounting, legal or financial advice.
Good to know
- Ask your broker or strata manager to show you the exact policy sentence that says what the percentage is applied to. It changes the answer a lot.
- A smaller earthquake can cost owners more than the insurance pays, because the insurer pays nothing until the deductible is used up.
- Find out whether your own condo insurance has loss assessment cover for earthquake, and how much. It is often missing or limited.
- Ask whether the strata's reserve fund can be used toward the deductible, and what the bylaws say about borrowing or a special levy.
Strata help in BC
Links open other websites. Programs change, so check each one is current.
- Strata Insurance Lines Explained – every line of a strata insurance summary in plain and technical language
- Strata Special Levy Calculator – each unit’s share of a levy by unit entitlement
- Strata financial reviews – an independent CPA review of the strata’s financial statements
- Strata finances and insurance (Province of BC) – official guidance
- Strata Property Act (BC Laws) – the rules for stratas in BC
- Talk to the firm – book an initial consultation
More strata tools
Want advice for your own situation?
This free tool is a courtesy of HJ Wu & Company Inc. (CPA), a Vancouver CPA firm offering accounting, tax, financial reporting and review assurance. Feedback on the calculators is welcome.