Homeowner’s Insurance: Is it enough to rebuild your home?

Visit the United Policy Holders site for answers to all insurance questions. The tips below are condensed from Top 10 Preparedness Tips for Colorado.

Top 10 Preparedness Tips for Colorado

Tip #1:   Insurance money — not charitable or government aid — makes the biggest difference in people’s ability to rebuild and recover after a disaster. FEMA money for individuals is needs-based and the maximum grant per household is $41,000. SBA loans have to be repaid. Charitable aid generally covers basic needs – not the cost of rebuilding a home. Insurance funds can and should flow quickly after a loss.

Tip #2:   Having the right kind and right amount of insurance on your property is extremely important. Post disaster surveys consistently show that up to 2/3 of impacted households find the amount of insurance on their homes to be significantly less than what builders are estimating their home’s replacement cost to be. And many households learn the hard way after a loss that basic home insurance does not cover flood or earthquake damage.

Tip #3:   Do not blindly trust that your insurance company has you fully covered. The software insurers use chronically underestimates the true replacement cost of homes. It’s important to calculate how much your home is insured for (per square foot of living space) and make sure that number is in line with local construction costs. Buying add-ons (also called “riders” or “endorsements”) that give you “50% Extended Replacement Cost,” building code upgrade and inflation protection are critically important. Keep your insurer informed if you make upgrades or acquire high-value items. 

Tip #4:   Create a home inventory, digitize, and safely store important documents off site. A cell phone video, photos or a written/printed spreadsheet are all helpful. Hopefully, you’ll never need the inventory, but if you do, you’ll be so glad you created it in advance and not under post-loss stress. Do it now!

Tip #5:   If you don’t have insurance coverage for flooding and earthquakes, consider buying it. Flooding events are common in Colorado, with over 40% of the losses occurring outside of traditional “flood zones.” Flood insurance provides important protection for heavy rain and related damage. Visit: www.floodsmart.gov to get informed.

Earth movement, earthquakes and landslides are not covered by most homeowner policies. Get a quote to add flood and earthquake protection to your insurance safety net.

Tip #6:   Take advantage of mitigation (risk reduction) discounts. For example, if you install an impact-resistant roofing material, a premium discount may help cover most of the additional cost over standard shingles. Living in a “Firewise USA Community” or helping your community earn that designation may also reduce your insurance premium. Find out what mitigation discounts or incentives your current insurance company may offer. 

Tip #7:   Avoid letting your insurance lapse. If money is tight, raise your deductible to reduce your premium and work with your insurer to reduce any non-essential coverages.

Tip # 8:   If your insurer drops you, start shopping ASAP. Read United Policyholders’ publication: Dropped by Your Insurer: www.uphelp.org/droppedco

Tip # 9:   Keep the area around your home and your gutters clear of brush, needles, etc. The #1 thing that helps firefighters is “defensible space.” Clear out gutters and roof drains regularly. Install screens on all your roof vents to keep embers from flying in. 

Tip # 10:  Sign up for local emergency alerts and have a “go bag” with necessities and a plan for replacing medications, etc. in the event you’re evacuated. Keep a copy of your current insurance policies in a safe place.

Call your insurance agent this month to review your policy and increase your coverage if needed. You may find that allowing for a bigger deductible will keep your monthly premiums affordable. Visit the CCCFPD Community Outreach website at www.CoalCreekCWPP.org for more tips, resources and information on wildfire mitigation and life in the Wildland-Urban Interface (WUI).

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