Montreal area earthquake should serve as a “wake-up call”

The 4.5-magnitude earthquake that occurred near Montreal just after midnight is unlikely to cause serious damage, but reinforces the region’s vulnerability, according to one industry expert.

“I don’t think we should see this as any kind of omen of a larger imminent event in the next hours or days…but it should serve as a wake-up call that that area is indeed susceptible to a quake,” Glenn McGillivray, managing director of the Institute for Catastrophic Loss Reduction told Canadian Underwriter in an interview. “This should be that little tap on the shoulder that people need to prepare.”

The earthquake that struck near St. Hyacinthe was felt in the greater Montreal area and as far as Ottawa, according to Natural Resources Canada.

At this month’s National Insurance Conference of Canada (NICC) in Quebec City, Insurance Bureau of Canada president and CEO Don Forgeron told delegates that earthquakes present a major risk to the country’s economy and the property and casualty industry.

He cited Natural Resources Canada estimates that within the next 50  years, there is a 5% to 15% chance of a major quake in the Ottawa/Montreal/Quebec City region, although he said other sources have predicted a major event sooner. That risk is higher in British Columbia, at about 30% over the next 50 years.

“The other thing that we’re concerned about in east is that infrastructure’s a lot older in the east than it is in the west,” McGillivray said. Even small earthquakes can cause old chimneys to fall, for example, which happened during the Val-des-Bois area earthquake in June 2010.

The industry doesn’t have solid numbers for the uptake of earthquake coverage in Quebec, but it is very low, McGillivray said. In British Columbia, a much higher-risk area, about 50% of residents have earthquake coverage, according to a report earlier this year from Square One Insurance.

An event like this Montreal-area earthquake usually prompts some people to call their brokers and ask about earthquake coverage, as well as a proactive response from industry groups like IBC, but that response often dies out quickly, he said. “It’s got to be a broad, concerted effort,” McGillivray said. “No one company is going to want more exposure.”