When you buy your first house, or even your second, you try not to think about the possibility that you could lose it. But as fire season rages through California it’s hard not to wonder what would happen if a fire hit and destroyed your home, even if you don’t live in a brushy, wildfire-prone area.
Making sure you have enough dwelling coverage is the most important factor when purchasing a new homeowners insurance policy but how do we do that? First, forget everything you know about the market value of your home. Instead make sure your insurance agent uses a comprehensive Replacement Cost Estimator. A Replacement Cost Estimator uses a database created by experts and takes all of your property’s specific information to estimate the cost to rebuild your home. Be sure that your agent gives you a copy of this report, so that you can confirm all the information used is accurate. Remember, there may be unexpected hikes in rebuilding costs, such as if your whole neighborhood is affected by the same fire.
Next, check your “Loss of Use” coverage. Is there enough coverage for your family to rent a house while your home is being rebuilt? Purves & Associates recommends at least 12 months loss of use coverage. That way you have enough time to make sure the rebuild is up to par, and don’t end up having to pay out of pocket if you run out of coverage.
Finally, review your policy with your agent every year – before you see the flames – to make sure that you are still getting the right coverage for your family.
Purves Insurance is located in Davis, CA and always puts coverage first. Yes, even before price.