Wildfires Burning - A Quick Home Insurance Check

While the Mendocino Complex has now grown to be officially the largest forest fire in California History - Now may be the time to do a home insurance check.

Forest Fires have always been one of the many dangers facing Marin County residents among numerous others. However in the past eight years, the danger seems worse than in previous decades.

According to the New York Times and Core Logic: "Roughly 60 percent of American homes are underinsured by an average of about 20 percent, "

As horrible as loss the loss of life and physical and emotional damage is - this should serve as an opportunity for 'Marinites' to focus on confirming that they have the proper home insurance in place.

Simple First Steps...

The obvious first thing to do is to confirm that your home insurance is currently in place. A simple email to your agent or insurer should be able to complete this task quickly.

The next important step (and one that is not discussed enough in the media) is to confirm that the coverage amount that you have for your home is actually enough to rebuild it. Many insurance concepts are somewhat strange, and the homeowners insurance primary building calculation is one of the strangest.

Look for the Coverage A number (primary coverage) on your home. It should be the first and one of the largest (and most specific numbers) on your declarations page. This 'coverage A' could be referred to as something different such as 'Dwelling' or similar. Confusingly this coverage amount does not necessarily constitute your entire rebuild amount for your home.

and this is where is get a bit confusing...

Most home insurance policies in California ALSO contain an extended rebuild endorsement coverage amount. It is imperative that you find out what this number is. Often it is 25%. This percentage adds an additional amount of insurance to your Coverage A. As an example of a home insurance policy that is listed as Coverage A of $651,000 it could have an additional $162,750 in coverage (with a 25% extended endorsement.) This total coverage of ($651,000 plus $162,750) $813,750 may represent your total rebuild coverage on your home. It can be very difficult to find out what this extended endorsement amount is on most American home insurance policies. You may want to reach out to your agent and inquire as to Total Rebuild Coverage A amount is.

Take it to a Contractor!

Now take this total amount of insurance coverage that you have and bring it to a contractor - ask them - Can I rebuild my house with this amount of coverage? I am not kidding when I tell you that I have seem total home coverage amounts that are not able to rebuild a Marin Kitchen let alone an entire house.

I will admit that I have never myself built a house from scratch and I am not a contractor. But it is hard to see too many homes being built in this county for $350,000?

The truth is that this 25% of additional insurance though is often just not enough. I prefer that most of my clients, in fact have far more in fact. Preferably they would have an extended rebuild coverage of 100% which basically doubles the Coverage A amount. Not very many carriers offer this option, but many offer at least a 50% amount.

That is Not All...

I wish I could tell you that that is all that you need to bring your rebuild coverage up to speed - sadly it is not. Endorsements such Building Ordinance & Law and increased Loss of Use coverage can also be extremely helpful after a wildfire as well as confirming that your home is as protected from the danger as it can be.

Hopefully wildfire will not be devastating for this county anytime soon.