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Financial Recovery Modelling for Earthquake Risk in Canada

Large earthquakes have the power to destroy homes, take lives, and disrupt the economic prosperity of individuals and even nations. After the immediate response phase, recovery and rebuilding can take many years. It is most commonly financed through a combination of government aid, insurance, philanthropy, and private funding; however, the balance of these sources depends on the country or sometimes the state/province in which the earthquake occurs.

In Canada, recovery financing after earthquakes is managed primarily through the private insurance sector. However, earthquake insurance penetration and deductibles vary widely between the seismically active western portion of the country and the relatively quiet eastern region. Prior to 2025, government financial aid to support earthquake shaking losses may have been available to those without insurance, depending on the province/territory; however, recent changes to the federal Disaster Financial Assistance Arrangements program now identify these costs as ineligible.

This study describes a custom financial module used with the OpenQuake engine’s scenario risk calculator, within the Canadian Seismic Risk Model framework, to estimate the proportion of ground-up and total losses that will be paid by the insurance sector, policy holders, and the uninsured following select major earthquakes in Canada. It reveals interesting trends in the proportion of costs held by policy holders in western Canada, due to large deductibles, as well as unsurprising findings about the majority of eastern Canadian building owners without adequate coverage. These findings are crucial in working towards narrowing the protection gap for property owners and ensuring the economic stability of the country in the wake of inevitable large seismic events.

Session: Advancing Seismic Hazard and Risk Assessment through Multi-Disciplinary Approaches - III

Type: Oral

Room: Ballroom B

Date: 4/15/2026

Presentation Time: 05:15 PM (local time)

Presenting Author: Tiegan Hobbs

Student Presenter: No

Invited Presentation: 

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Additional Authors