Check if your home insurance is sufficient
As a person with a lot of experience in insurance I suggest that if you’re a real estate owner you should check your coverage each year in order to find out whether you have enough insurance to rebuild your house and replace your belongings if everything is lost in a fire or other unexpected event. What you should ask yourself is:
- Is the “replacement cost” covered by your policy acceptable taking into consideration the costs of labor and materials in your area? For instance, it’s rather doubtful that many homes in Silicon Valley could be rebuilt for less than $200 a square foot.
- Does your policy involve “extended or modified replacement cost coverage?” This gives you a certain percentage above the policy limit to rebuild your house.
- Does your policy include a “building code endorsement”? It covers the costs of bringing your home up to building safety codes when it is being rebuilt.
- Getting reimbursed for a claim after a fire is easier when you have prepared an inventory of the objects present in your home. There is some free software available that can help to speed up the process.
