As recovery efforts move forward in western states after devastating wildfires caused extensive damage to or outright destruction of homes, many will soon face another challenge with disaster insurance payments. In some cases, insurance payments may not be enough to fully compensate for the damages and losses incurred.
Will you be able to rebuild?
This isn’t about the real estate cost of your home or what’s needed to satisfy your mortage lender. You actually need enough insurance to rebuild your home after a disaster that addresses current construction costs. You’ll want to consider replacement cost, extended replacement cost in the event of a widespread disaster, an inflation guard, ordinance or law coverage, as well as water back-up and flood insurance.
Are all your possessions covered?
Conducting a home inventory is the best way to determine if your homeowners insurance policy is up to the task of replacing not just the structure of your home but also all of your possessions. Home inventory worksheets, software, and even apps are available online and make recording such items as furniture, antiques, jewelry, china, and clothes, as well as so much more. Your insurance agent can best help you determine if you should insure your possessions for their actual case value or their replacement cost.
Can you cover additional living expenses?
If the damage to your home has made it unlivable, additional insurance coverage can cover the cost of living somewhere else. While it may not cover the cost of your mortage or trips to the grocery story, it should cover hotel bills and meals at restaurants. You should be aware of the length of time you’ll be covered under your policy as well as the amount of coverage.
Do your best to be prepared before disaster strikes your home or business. Put emergency procedures in place and discuss insurance options with your insurance agency today.