British Columbia’s insurance market is better prepared for a major earthquake than it was a decade ago, but too many homeowners and small commercial property owners are still going without earthquake cover, according to Ian Rutherford (pictured), head of Pacific region and executive property underwriter at HDI Global SE.
“Where I’m less comfortable myself, I think, is that there still is a limited take-up of earthquake cover, especially if you get down to the homeowner level,” Rutherford told Insurance Business.
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Many homeowners and smaller commercial owners don’t buy it because it is very expensive in a high-risk zone, he said, and they need to be prepared if a major quake hits.
“If you don’t have the coverage, it’s a real big gap,” Rutherford said.
Rutherford has worked in the industry in Vancouver for about 30 years. In that time, he said, earthquakes have remained the region’s biggest single catastrophe risk.
“Earthquake is definitely the sort of defining peak event exposure,” he said.
Natural Resources Canada estimates a 30% chance of a major earthquake in southwestern British Columbia over the next 50 years, a figure the Insurance Bureau of Canada (IBC) has cited in its preparedness work. Rutherford said that timeframe is far shorter than what the industry discussed when he started his career.
That means “a lot of people currently working in the industry have a good chance of seeing that event happen,” he said.
Earthquake readiness has also been a focus for regulators and the industry. At the National Insurance Conference of Canada in both 2025 and 2026, OSFI Superintendent Peter Routledge and IBC President and CEO Celyeste Power returned to the subject in their fireside chats, with the earlier discussion centred on a joint tabletop exercise to stress-test the industry’s capital against a severe quake.
Rutherford said that work has paid off, and that the market itself is in a stronger position.
“The insurance market itself is in better shape than it has been even 10 years ago,” he said.
Better modelling is a big part of that, Rutherford said, and OSFI has pushed hard on capital adequacy and sound practices.
“Carriers are modeling their aggregations way more rigorously and much more accurately than they were back then,” he said.
Standard home insurance in Canada generally excludes earthquake damage, which must be bought as an endorsement or a separate policy. IBC has estimated that only about 50% to 65% of B.C. homeowners carry earthquake coverage, and Canada remains the only high-risk G7 country without a government-backed catastrophe insurance backstop.
Even with coverage, owners can face high costs. Earthquake deductibles are usually set as a percentage of insured value, and according to the B.C. government, strata corporation deductibles can range from 10% to 20% of a building’s full replacement value.
Rutherford said the most important step a B.C. property owner can take this year is getting their values right.
“I think the number one thing is to know your numbers,” he said.
That means updating statements of values every year, confirming current replacement costs, construction type, year built and any seismic upgrades, Rutherford said. Undervaluation has been a persistent problem throughout his career.
“Everyone says that they are going to fix this undervaluation problem, but it’s not an easy thing to fix,” he said.
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Construction inflation since the COVID-19 pandemic has left many properties underinsured, Rutherford said, and a soft market can make it easier to lose sight of coinsurance and similar clauses.
“That gap is going to be exposed and it’s going to be at the worst possible moment,” he said.
Rutherford said clients should sit down with their brokers and look at their earthquake deductible as a dollar figure rather than a percentage.
“If you’ve got a $50 million building with a 10% deductible, that’s $5 million,” he said. “So you have to ask yourself, can you really afford to fund that after a loss?”
Owners should also ask how long they could operate if their key suppliers were out of business for six months, and put a short-term continuity plan in place, he said.
“That answer might be worth more than anything else you can do, I’d say, this year, because good data is really going to help you get better terms from underwriters, and it’s a direct payoff to keeping your business operating,” Rutherford said.
