(The following information is from United Policyholders. For more information, contact Garry Sanfaçon, Boulder County Office of Resilience & Recovery, 720-564-2642 or firstname.lastname@example.org)
A critical component of being vigilant and prepared is making sure your home is adequately insured. Government and charitable aid programs will not cover the cost of rebuilding a destroyed home. And agents, brokers and insurers often underestimate your home’s replacement cost. Finally, oral promises by insurance reps that you’re fully covered are useless if you can’t prove them later.
Why does it matter? More than 60% of 2010 Fourmile Canyon Fire and 100% of 2016 Cold Springs Fire survivors were underinsured and this proved to be a leading cause for the inability to rebuild. Take a few minutes and complete these three actions.
1. Make sure you are adequately insured
How do you know if you have enough coverage?
- First, go to your “Declaration Page” of your policy, which is a map to your coverage.
- Coverage “A” is the amount of insurance covering your Dwelling. This is what you will have to rebuild your home in the event of a catastrophic event. This amount should be very close to what it would cost to actually rebuild your home.
- You can quickly calculate the cost-per-square-foot coverage amount by dividing the large number by the livable square footage in your home. For example, your coverage may be $400,000 and you have 2,000 square feet (do not include your garage) which when divided equals $200 per square foot to rebuild.
- For basic mountain homes, I contacted local builders and the cost-per-square-foot is roughly $300-325/sq. ft. currently. Much higher for custom homes.
- For a more accurate estimate of the cost to rebuild your home, pay for a professional home replacement cost estimator or local building contractor. Many insurers offer this service at no charge.
- Don’t rely on what your home is appraised for or what homes have sold for in the area to estimate cost to rebuild. Code upgrade (ordinance or law) coverage should be a minimum of 25% in your policy.
- Flood Insurance: Even if you do not live in a designated flood zone, you may need flood insurance to protect you from unexpected water flow (policies have a 30 day wait period).
If you find you are underinsured call your agent immediately and request an increase to your coverage. If the agent assures you that you are adequately covered, ask that they put that statement in writing. Oral promises by insurance representatives are useless if you can’t prove them later.
2. Create a home inventory
Why? Because preparing an inventory for the insurance company after a total loss is very painful, difficult, and time-consuming. And after a traumatic loss it is nearly impossible to remember everything you once had, so most people never collect full insurance benefits. Below are two ways to create a home inventory depending on the amount of time you have to dedicate.
- Create a spreadsheet of your belongings and save it on a secure computer, flash drive, or print out the sheets. Here is an excellent resource to get started: www.UPHelp.org/pubs/how-create -home-inventory. Remember to update the inventory as you acquire new items, and remove items you no longer have. Scanning and adding receipts to the document can help guarantee a more accurate payout.
- Photograph or video the inside and outside of your home (open closets and drawers) and upload the images onto a flash drive or store them in the cloud.
3. Store documents & home inventory offsite
Why is this important? Many home-use safes (even fireproof-rated safes) did not survive the extreme heat from recent fires. Therefore, you should store important documents and your home inventory in a secure place outside of your home. This could be in your office or a safe deposit box.
Scanning all documents into digital form and saving them in the cloud is another option.