Strata Plan KTS7890 in Kamloops has an earthquake insurance deductible of 10% of the total insured value of the property, which is $20,000,000. If an earthquake causes $5,000,000 in damage, what amount would the strata corporation be responsible for as its deductible?

Question: Strata Plan KTS7890 in Kamloops has an earthquake insurance deductible of 10% of the total insured value of the property, which is $20,000,000. If an earthquake causes $5,000,000 in damage, what amount would the strata corporation be responsible for as its deductible?

Answer options:

• $500,000, representing 10% of the damage. ✅ $2,000,000, representing 10% of the total insured value.
• $200,000, representing 10% of the strata corporation's annual budget.
• Zero, as earthquake damage is typically fully covered by standard policies.

Correct answer: $2,000,000, representing 10% of the total insured value.

Explanation: Earthquake insurance deductibles are often high and are typically calculated as a percentage of the total insured value of the property, not the claim amount. In this case, 10% of $20,000,000 is $2,000,000. Section 149(1) of the Strata Property Act allows for reasonable deductibles.