Authorities are also investigating why some new skyscrapers in the capital city of Santiago and in the city of Concepcion did not withstand the force of the earthquake.
The National Emergency Office says the country is rocked by massive aftershocks several times a day and panic is unavoidable.
However, most damage was caused by the tsunami which followed Saturday’s earthquake.
Natalia Silva, an engineer with the National Emergency Office, says Chile’s coastal villages were the worst hit and some may not be able to be saved.
“In our rescue operations we’ve seen that the situation is worse than we hoped, and we’re continuing to find more victims and casualties,” Ms Silva said.
She says the worst-hit areas include towns like Constitucion, Concepcion, Talcahuano and Tome, all situated midway down Chile’s coast near the epicentre of the quake.
Aftershocks continue at the rate of two or three times a day.
“With the aftershocks, the population is particularly on edge and fearful and today with the last aftershock there was a false alarm of an earthquake and a tsunami and so the population began to panic,” Ms Silva said.
She says the false alarm began as a rumour but was picked up by the local media, spreading quickly among a nervous community.
In seaside towns like Talca, firemen are checking buildings to see if it is safe for residents to return
“This is not habitable, not with those cracks in the wall, especially the diagonal ones,” fireman Rodrigo Sepulveda said.
“We are evaluating the houses and stores, so people won’t face any more risks with the aftershocks.
“They’re strong aftershocks, they’re not light at all.”
However, Ms Silva says Chile is the country most prone to earthquakes in the world and many buildings in the cities were sufficiently prepared.
But she says of those that collapsed, some were newly built tower blocks and the National Emergencies Office is investigating whether they were built in compliance with the law.
Other new, damaged tower blocks are still standing but are in a precarious position and until recently still housed residents.
“Some were here in Santiago and others in Concepcion, and for the most part there haven’t been many fatalities,” Ms Silva said.
“But yesterday, for example, due to an aftershock, we had to evacuate residents of a building in Santiago and the buildings nearby because there was an immediate risk that the buildings were going to collapse.”
Ms Silva says it is hard to know how long the seismic activity will continue, but she estimates the aftershocks could go on for months after Saturday’s 8.8 magnitude quake.