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When shopping around for homeowners insurance, make sure you know your fire coverage! I asked my buyer’s agent, Cindy Larson, who last year lost her family home in a fire to give some in-site on her experience.
On August 3, 2015 I got the call that no one really expects, the call from your spouse that your house is on fire, and spreading fast. I always knew we had home owners insurance, but I will be honest, I never thought much about it, because the likely hood in my mind of a home burning to the ground these days seemed pretty slim, well I was wrong.
We purchased a preexisting 3,400 sq. ft., 5 bedroom home three months prior to the fire. The home was purchased for $218,000.00. We loved the inside of the home but were having the outside of the house renovated by a contractor. Making a long story short, the contractor set a small fire and left for the day. Luckily my son let the dog outside because quickly the fire spread on to the deck, my husband tried to put out the fire but the fire reached the propane tank on the grill, exploded and the house was in gulfed in flames in minutes. All made it out of the home, but the house and vehicle was gone.
Since we had just purchased a home my husband knew our approximate coverage for the home, but called into our insurance agents who set our mind at ease we would be covered for $325,000.00 for the home regardless of who was at fault. We felt at ease since we just purchased the house for $218,000.00 and were covered for $325,000.00. It was not until we shopped around for builders did we find out we were underinsured. $64.00 a sq. ft. was what we paid for our home, the lowest bid to rebuild our home was for $425,000.00 which is $122.00 a sq. ft.! Ouch! Needless to say we were forced to find another preexisting home and sell the land.
Things I want you to pass along to you in case the unfortunate happens:
- Know your insurance agent. I heard HORROR stories from people who have went through a fire that their insurance company fought them on everything. We had been with our insurance company for many years, I will give credit where credit is due… State Farm was there for us all the way through. They had people out the next morning to help us with our claims and give us some direction on where to go. They called and checked up on us and bent over backwards to help whenever they could!
- Make sure you are covered even if it was not your fault. When the Fire Investigators questioned the contractor he changed his story about setting the fire. After much going back and forth, our insurance company thought it was a “he said he said” scenario and decided not to go after the contractor. Luckily we were covered no matter whose fault it was. Not the case with all insurance policies.
- Are you covered to rebuild? In our market new construction is almost double of preexisting homes. Another reason to have a long lasting relationship with your Real Estate Agent. Every couple of years just touch base with them to say “Hi” and ask them where the market is at with $$ per sq. ft. for new construction. Then have a conversation with your insurance agent and see where you are.
- Take pictures of your personal belongings. Other than the hardship of losing irreplaceable items, the most time consuming, frustrating part is documenting every single personal item. Pictures stored of your items and home on a “cloud” drive will remind you of items as you are making your lists.
- Know your neighbors and community. From the bottom of our hearts we will be forever grateful for those who stepped in to help out. From local business’, to fire fighters, neighbors dropping off food and clothing, and most importantly to our family and friends!
- I hope this kind of disaster doesn't find you in the future, but if it does knowing your coverage can be one less hassle so you can concentrate on what is important.
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