Category Archives: Homeowners Insurance

Tips to prepare for a wildfire

From our friends at Acuity Insurance comes this information, which we don’t want to have to think about, but it is better to consider this now and be prepared in advance. This summer has shown a preponderance of dry, drought conditions and high temperatures leading unfortunately to terrible fires burning around the Southwest.

Listed here are several suggestions that you can implement immediately. Others need to be considered at the time of construction or remodeling. You should also contact your local fire department, forestry office, emergency management office or building department for information about local fire laws, building codes and protection measures. Obtain local building codes and weed abatement ordinances for structures built near wooded areas.

Find Out What Your Fire Risk Is

Learn about the history of wildfire in your area. Be aware of recent weather. A long period without rain increases the risk of wildfire. Consider having a professional inspect your property and offer recommendations for reducing the wildfire risk. Determine your community’s ability to respond to wildfire.

  • Are roads leading to your property clearly marked?
  • Are the roads wide enough to allow firefighting equipment to get through?
  • Is your house number visible from the roadside?

Learn and teach safe fire practices.

  • Build fires away from nearby trees or bushes.
  • Always have a way to extinguish the fire quickly and completely.
  • Install smoke detectors on every level of your home and near sleeping areas.
  • Never leave a fire, even “just” a cigarette, burning unattended.
  • Avoid open burning completely, and especially during dry season.

Always be ready for an emergency evacuation.

  • Evacuation may be the only way to protect your family in a wildfire.
  • Know where to go and what to bring with you.
  • You should plan several escape routes in case roads are blocked by a wildfire.

What happens if I don’t “schedule” my more expensive belongings?

If you don’t “schedule personal property,” there may be limits on how much coverage you get for “special classifications” of items such as jewelry, watches, silverware, furs, firearms, computers, art and other items or classes. Without Scheduled Personal Property, there are general limits of $1,000 or $2,000. The exact limits of coverage will be shown in Section I of your policy. With a Scheduled Personal Property endorsement, you will typically need to provide both a limit per class desired (blanket), as well as a schedule of individual items with a replacement cost above a certain threshold (scheduled). A scheduled personal property floater usually provides coverage for loss of any type, including accidental loss or “mysterious disappearance.”

What is the difference between Replacement Cost and Actual Cash Value (ACV)?

Actual cash value only pays to replace your home or property after subtracting a deduction for depreciation. For a higher premium, you can purchase replacement cost coverage, which pays the actual cost of replacing your home or property at the price of what it would cost to purchase that item new, today. Replacement cost coverage premiums are about 10 percent more than ACV. Replacement cost contents is an “endorsement” you should definitely consider. (Endorsements are “forms” or changes/additions of special coverage to your policy)

How does an umbrella or excess liability work?

If you have assets (property + savings/investments) that are worth more than the liability limits of your homeowner policy, you should consider purchasing an umbrella policy, also known as “excess liability.” Umbrella coverage is called excess because it does not start to pay out until after you have used up the liability insurance in your homeowners or auto policy (depending on the incident). Umbrella liability covers more issues than the other liability policies, including such things a libel and slander. Many companies will require that you have a minimum of $300,000 liability coverage on your home and car before you can purchase an umbrella policy.

What is a blanket limit?

A blanket limit, provided by some companies, on your homeowners insurance, combines the totals available for the individual, normally separate property coverages, into one larger number. Claims can be paid out of the blanket limit, and do not have to be allocated exactly how normal, separate coverages would be. The separate property coverages usually include:

  • The structure of your home (covered at replacement cost, but does not include cost of land)
  • Outlying, non-attached structures on your property
  • Your personal property (possessions)
  • Cost of living expenses if your home suffers a catastrophic loss

In addition to property related coverages, you will also have insurance to cover your liability to others (minimum $100,000) and medical payments to others. These are not contained under a blanket limit.