Forest Fire Season and Home Owners Insurance – Are You Fully Covered?

July 13, 2015

homeowners-insuranceIf you own a home than chances are you have home owners insurance. If you don’t then you definitely should, but before you go shopping for a home owners insurance policy keep on reading, you might be surprised at what you are not covered for. Often home owners insurance may leave you with a coverage gap because certain restrictions that they have.

1) Loss Of Use

Loss of use coverage is to provide you with a place to stay in the event of damage to your home that is so severe that you cannot live in it until it has been repaired. What you might expect is that your home owners insurance would pay for your hotel expensive until you can move back into your home. Unfortunately this not always the case. Your home owners insurance policy may not have any sort of loss of use provision whatsoever, or if it does the policy may limit the amount of time that these expenses would be paid for along with a maximum daily amount. Make sure you are clear as to what your policy covers as an unexpected expense such as this can quickly add up putting you at financial risk.

2) Replacement Cost

Most of would imagine that that our home owners insurance policy would allow us to purchase new replacements of whatever it is that was damaged. Check the replacement clause in your home owners insurance policy to make sure, or you may end up only getting coverage for the replacement value, which could be far lower than what it cost you to purchase the item in the first place, or buy a new replacement. Lets use a computer that was destroyed in a home fire as an example. Lets say you purchased it for $2,500 3 years ago. The insurance company may say that a 3 year old computer is only worth a fraction of that value, say $500. Obviously you are not going to be able purchase a brand new computer that was as good as your old one for that price. One more reason to look at your policy closely so you are sure you are getting the coverage that you require.

3) Natural Disasters

Home owners insurance policies almost always exclude “Acts of God”; this includes flood, forest fires, earthquakes, landslides, hurricanes, tornadoes, and even terrorism. Floods are a fairly common type of property damage that can have disastrous effects. Basically all of your belongings could be ruined along with your home. Even after everything is dried out you could still have mold in your walls or carpet. To protect yourself from unfortunate circumstances such as this you might have to get a separate flood policy. In British Columbia insurance companies may not cover you if your home is destroyed by a forest fire. If you have a rural property where it is difficult for the fire department to fight a fire on your property then it may be even harder to get coverage. The consequences of loosing your entire home and its contents could be devastating for you and your family. Imagine paying your mortgage payment each month when you don’t even have your home to live in anymore. Don’t let this happen to you. If your current insurance company will not cover you find one that will.

4) Termites

Termites are not a huge problem in British Columbia, but they do live all over North America. The further south you live the more destructive they can be. That being said cold weather does not effect the termite life cycle so don’t consider your home immune to them just because of our cold winters. My best advice would be to research your area to see if you termites are a problem where you live. If they are check your home insurance policy. Most policies exclude any pest damage including termites. Termites eat wood and can cause massive damage that can cost tens of thousands of dollars to repair. So if you think termites might be a problem be proactive and call a professional. Get your home inspected regularly and sprayed to kill these nasty critters.

5) Valuation of Loss

After you have a insurance claim and appraiser will be sent to your home from the insurance company to assess a value to your loss. Just because the insurance company sets a value to your loss it doesn’t mean that you have to accept it. This is why people take photographs and keep receipts of the valuable contents in their homes. With proof that their loss was higher than what the insurance company decides they can negotiate for a higher settlement. A good investment would be a fire safe where you can store these documents just in case you need them. A modern solution would be to store digital copies of proof of value on a computer server elsewhere.

Creating Your Own Insurance

These are just some of the things that can go wrong with your home owners insurance when you really need it. Spend some time going over your policy looking for exclusions such as the ones above. Then talk to your insurance agent and see

if they have separate policies that can be added on to your current one. If there is no way you can get coverage for something specific (Like forest fires) then it is up to you to come up with a plan to protect yourself; For example in the case of forest fires in a rural area installing a pool could be a solution. With a water pump and hoses you would be at least some-what prepared to defend your valuable asset giving you your own personalized form of insurance.

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