Fire has been a topic in the news of late with the California wildfires and the tremendous amount of lives impacted. I want to raise the topic on this blog as I know that it is probably not something we think about in the wintertime in the Pacific Northwest. However, if you go Clark Griswold during the holidays this is some information you will want to know.
I started with the question of why do more fires happen in the winter? One source, realtor.com, indicates,
It turns out there is: According to a study by the United States Fire Administration, titled “The Seasonal Nature of Fires,” although the total number of fires decreases during the winter months, the number of “structural fires”—meaning fires in buildings—rises.
The cause, when you think about it, is rather obvious: Cold weather means we crank up the heat—including our use of space heaters and electric blankets—all of which can spark fires, particularly if used improperly. As in, if you’re keeping them on for too long or placing them too close to flammable items.
If you find yourself in the middle of a house fire after you call the fire department, CALL YOUR INSURANCE AGENT!
They should be in the best position to guide you through the process of protecting possessions, relocating your family, rebuilding your home, replacing your personal property and finally returning to your home, known as the claims process. They should also be able to tell you how your policy will apply to the claim.
Make sure you are covered!
If you want to, and know where to start, go ahead and pull out your policy of insurance right now. The policy should have your name and address on it. Check both for accuracy.
The next place to check is the dwelling coverage. This is the amount of coverage on your home. In this market currently, you most likely want to have coverage in the range of $150 per square foot. So, if you have a 1500 square foot house, at a minimum you want to have coverage for the home of $225,000. Keep in mind that each company, each policy, and each home is different, so we are using this as only a baseline comparison. Attached to this coverage is another percentage which is sometimes referred to as extended replacement cost. The % generally refers to the additional coverage available if the dwelling limits are not enough. Some policies now offer Guaranteed Replacement Cost instead of a % coverage. Ask your current company if they offer this coverage.
After that, the next coverage to consider is coverage for separate structures. That is intended to cover buildings that are not attached as part of the main dwelling. Detached garages and sheds are perfect examples. You will want enough coverage here to replace the items that are intended to be covered.
Following this, the next coverage to consider is personal property coverage. This would be anything that you would take with you when you move. Put another way, if you picked the house up and shook it, anything that falls out the front door. This includes clothes, furniture, electronic items etc. You will want to be aware of special limits like those on artwork, jewelry, or business personal property. These often limit the exposure for those certain items.
Coverage that is often overlooked is Additional Living Expense. This provides money for you to find secondary housing and increased food cost due to the fire. Some policies may offer up to 24 months of coverage and will vary depending on policy language. You want to make sure to have enough money in this coverage to provide short-term hotel coverage, long-term housing, and increased meal expense. Imagine the cost to house, feed, and clothe a family of four over the holidays.
Also, check your deductible and replacement cost coverage. Your deductible is the amount of the loss you are responsible for paying upon completion of the repairs. If you have a stated deductible, say $1500 that is the amount you would owe. If you have a percentage deductible, like 2% your deductible is a % of the coverage placed on the home. If your coverage for your home indicates $300,000 and you have a 2% deductible that means your deductible is really $6,000.
You also want the check and make sure you have Replacement Cost on everything – the dwelling, the separate structures, and the personal property. On the dwelling, you may even be able to have Guaranteed Replacement Cost. The one that you want to avoid is Actual Cash Value or ACV. This would mean that if an item is 10 years old and has a 20-year lifespan you would be reimbursed 50% of the Replacement Cost of that item.
If reading this has given you the spins or has you questioning the amount of coverage on your home give us a call at 971-303-8508. We will give you a free policy review and if the coverage you have is better than what we can offer, we will tell you that.
I hope you have a safe and happy holiday season.
For more tips on fire safety, you can visit the red cross here!