With forest fires raging across the west, it can only be a matter of time before a major fire breaks out here in Southern California. And the recovery is likely to be a lot tougher this year as many Southern Californians are likely to be underinsured due to the pandemic.
Linda Ferry lives in the canyons and works hard to keep her home safe during the fire season.
“I’ve put blood, sweat, and tears into cleaning up this place so it’s always ready for a fire,” said Ferry.
Insurance industry experts say cleaning your property, like Ferry does, is the most important thing you can do to keep your home safe from wildfire. But you also have to secure it financially, said Nicole Ganley of the American Property Casualty Insurance Association.
“It’s really important to be financially responsible,” said Ganley. “Your home is your greatest asset and you want to protect it.”
That means you need to check your home insurance, Ganley said. She said a lot of people are likely underinsured.
Why? There is a shortage of wood thanks to the factories that were closed or slowed down during the pandemic. Add to this the demand for wood created by other natural disasters, and this has caused the price of wood to skyrocket. It’s up 400%, said Ganley.
That means that rebuilding your home now could cost a lot more than your insurance covers. So you’ll either have to spend thousands of dollars in cash or rebuild a smaller house.
“Instead of taking your 4/3 down, you have to take down a 3/2 and you don’t want that,” said Ganley.
So she suggests you call your insurance agent and ask about the extended replacement coverage.
“With Extended Replacement Coverage, you get 150% of the coverage,” said Ganley. “It will give you more to meet this surge in demand.”
Ganley also suggests tweaking your insurance policy to accommodate inflation and building code updates.
Ganley acknowledged that these policy changes will cost you a little more, but she said it was a small price to pay for your peace of mind.
“A five or ten minute phone call can make all the difference between whether you can rebuild the house you invested in or not,” she said.