Preparing for Fires and Other Disasters

by Carole A. Lane on November 8th, 2007

If you were fortunate enough to survive the latest fires, you may be wondering if your insurance will sufficiently cover you the next time around. I know I was. A good friend, Murray, sent me the following advice, which is being posted by permission of “Jim the Insurance Adjuster”:

Preparing for Disaster

Photograph the inside and outside of your home. Video or stills. Photograph and list anything of real value (jewelry, paintings, sculpture, special guns, silver, coin collections, etc.).

Keep the photos, tape, disk and a copy of your insurance policy in your safety deposit box (it is only like $35 per year). Also place copies of wills, deeds, passports in the box. Don’t keep the originals at home. In the event of a fire, earthquake, hurricane, flood, whatever and however unlikely, you will have the edge over 98% of the general population trying to recover their home and belongings.

Update the photos and policy in the box every year. Make it an event: photos, trip to bank, celebrate with a dinner or at least a lunch out. You cannot imagine how easy your life and your insurance adjuster’s life will be if you actually need to use these photos.

Another note…fire safes work sometimes…if it is not very close to a fire. I have seen them work once in 12 years. They never work in a forest fire. Don’t place the above listed items in the fire safe. They are generally reduced to ash inside the box. Place important items you want to save, family photos, stuff, etc. in a brief case under the bed. If you have to evacuate or run for your life, grab it and run. Not a bad idea to throw in a small flash light, some antibiotic cream and a box of band aids (you never know, I was a Boy Scout after all).

Insurance 101

Check your insurance policy. Not the day the storm or fire is coming. Changes to a policy during a storm or event take 30 days to go into effect.

Are the limits enough to replace your home? Remember, the land is not insured. Land value is generally the part that increases the most every year. Don’t use your tax valuation, It includes the land. It can also we way off base. The actual home goes up slightly each year as materials and labor increase over time. Call and ask the local building association what the price per square foot is for your particular area. Multiply times the square footage of your home. Add 10% for good measure. Compare that to the dwelling limit on your property in the policy.

The other coverages like Other Structures, Contents (personal property) and Additional Living Expenses are straight percentages of the Dwelling limit. 10%, 70%, 20% respectively. (Example: $100,000 Dwelling (house), $10,000 Other Structures (shed, driveway, pool, spa, guest home, separate garage, green house, walkways, fountain, etc. make sure you have enough coverage here), $70,000 Contents (if you picked up your house and shook it, the contents would fall out), $20,000 Additional Living Expenses (this is the money for a rental home and other additional expenses for up to two years until your home is rebuilt).

Each policy is different and some have additional endorsements that add percentages for a total loss. Most insurance companies offer policies that have an optional 50% in case of total loss clause. Those are a really good idea and they are not expensive to add on. AARP Hartford endorsements like that are $5 per year. Not bad.

If you have anything of particular increased value, schedule it.Write it separately as “scheduled property”. This gives full attention to the actual value of an item like fine art, jewelry, coins or cameras. It also gives additional coverage for mysterious disappearance. It also gives breakage coverage. That means you don’t have to have a break-in or a police report. It just may have turned up missing. I scheduled my cameras on my policy. It cost $20 per year. I dropped one. $900 to replace, no problem.

If you are renting a home or an apartment. Get a rental policy. It is usually less than $50 per year. Without it you lose everything and end up in the street with nothing.

Thanks, Jim and Murray, for passing on this great advice!

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