The recent devastation caused by the Wildfires that are raging through California communities has caused concern with many Homeowners. The question staring many of them in the face is “Am I covered”. In a “normal” one off Home fire the answer would for many residents be “yes”. But these are not normal circumstances.
The most recent Wildfire in the Paradise, CA area has seen something like 9000 structures being lost. When you have that kind of large scale destruction you do not have enough Contractors to rebuild them all. So Contractors from out of state, or out of the area, have to be brought in to help those who have lost he homes. These Contractors have to stay in motels, eat every meal out, do their laundry in laundromats, and generally live on the road while they attend to business. Where many homeowners had sufficient coverage in a “normal” housefire loss situation, lets say @$300 per square foot (p.s.f.) of coverage, these Contractors, because they are living on the road, have a much higher cost to rebuild the homes, (In the Santa Rosa fires we experienced last year we saw quotes of $500-$800 p.s.f. for the same house covered for $300 p.s.f.). The Homeowner is looking at their Insurance Agent and saying “I thought I was covered”, and the Agent is saying ”Well, you would be in a normal situation, but this is anything but normal”. The Agent was doing their job, but if they had tried to sell the Homeowner the $500-$800 p.s.f. of coverage needed for this abnormal situation the Homeowner would have gone elsewhere.
The Homeowner has to make a decision.
- If the Carrier will not provide the extra coverage they are left covering the added cost themselves
- Taking the Cash. instead of reconstructing the home. and buying a property out of the area, and just sitting on or selling the land of their former home, or
- Waiting until prices have come back to normal and then rebuilding, hoping that by that time they haven’t increased too much to replace their old home. They may have to rebuild smaller.
None of these are particularly attractive options.
Luckily, some Carriers are finding ways to provide their policyowners with added coverage. Farmers, my primary Carrier, is providing their policy holders with 100% of the Contents coverage without requiring the usual audit of contents that need to be replaced. Contents coverage is a percentage of the rated Dwelling amount, and usually more than enough (@60%) so this is additional coverage that can be used to make up for the insufficient Dwelling coverage in this abnormal situation.
I hope you have Farmers, or your carrier is going the extra mile to take care of you. If not, it will leave you with a bad taste about your insurance and that’s not what anyone wants. If you have questions, or there is anything my agency can do for you, please contact me: CTROWBRIDGE@FARMERSAGENT.COM, 650-FARMERS (327-6377) visit my Blog: Corrinblogsinsurance.com
