Fire Insurance Limitations You Need to Know About

Fire Insurance Limitations You Need to Know About

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A chilling side-by-side before and after photo shows the devastation of wildfires sweeping through northern California’s wine country. That subdivision in Santa Rosa is among the thousands of homes and businesses have been recently wiped out across the Golden State.

With wildfire season still burning, you may be wondering if your insurance coverage is sufficient?

The good news, a majority of homeowners insurance policies cover fire damage. But if you don’t read the fine print there could be some surprises.

Here are a few things to keep in mind about fire insurance coverage:

1. If you live in a high-risk area, such as a canyon, you may need to pay more for additional coverage.

2. California homeowners who can’t get coverage in the marketplace may be able to get protection from the California FAIR plan as a last resort. FAIR covers up to $1.5 million for a structure and its contents.

3. The replacement cost of your home in your insurance policy may not adequately reflect today’s condition in your home. That means you could pay more out of pocket in a worst-case scenario.

One possible solution is to add an extended replacement cost endorsement to your policy. The additional coverage should accommodate a portion of unexpected cost increases.

Another option is you could also purchase extra coverage for code upgrades if your electrical or plumbing systems are dated.

4. Document your belongings. Grab your smartphone and take photos or video of your stuff, it can help if your insurer disputes high-value items.

5. In case you have to evacuate your property, save your receipts. Many homeowners policies include “additional living expenses” coverage, for the costs of staying in a hotel, food, and rentals.

With a very active wildfire season in California and across the West, now is the time to make sure your insurance coverage is up to date and that nothing unexpected has changed in your policy.

If you have questions or concerns about your coverage, reach out to a trusted insurance advisor.