If your home is in a wildfire-prone area, you may have noticed that insurance companies are becoming more strict with their policies. Some insurers even deny or discontinue coverage for homeowners in these areas.
But don’t panic; you can take specific steps to prevent fire damage. And in some cases, these steps will even qualify you for discounts on your home insurance.
Buildings coverage helps cover damage to your home’s structure. It includes roofs, siding, and other exterior materials that fire could damage. It can also protect your belongings inside the home.
This type of coverage is essential for your peace of mind if you live in a wildfire-prone area. It can protect your home from destruction and the things you own inside it — such as furniture, electronics, and appliances.
You can get this type of coverage as an add-on to your homeowners’ insurance policy, or it can be purchased separately as a separate policy. The amount of coverage you get will depend on the size and value of your home.
Some insurers offer unlimited cover, while others work out the sum insured based on a general assessment of your property and the type and age of the house. It may not suit your specific property and could result in you needing more coverage, so it is worth shopping around to find a policy that suits your needs.
Some insurance companies will automatically increase your building’s coverage in line with rebuild costs, which tend to rise over time. So it is a better option than having individually scheduled building limits. But you should still check your policy for exclusions or restrictions, such as limiting how much you can replace the building if a fire destroys it.
Additional Living Expenses Coverage
If a fire destroys your home or a hurricane rips the roof off, you could have to move elsewhere until repairs are made. Having adequate additional living expenses coverage on your wildfire insurance policy makes this difficult situation easier on you and your family.
Almost every homeowner’s policy offers this coverage to help you with relocation costs. It covers reasonable expenses like food, hotel or rental home charges, and other costs you wouldn’t usually face while living in your home.
It also helps with rent, utilities, and other necessities if your home is uninhabitable because of a covered loss. Coverage varies by insurer, but generally, it accounts for 10 to 20 percent of your policy’s dwelling or personal property coverage.
You can add this protection to your homeowners’ insurance policy or purchase it as a separate product. Regardless of your chosen option, it will be a valuable tool to get you through the rebuilding process.
Additional living expense coverage, or ALE, is one of the most valuable benefits you can receive from your home insurance policy.
Personal Property Coverage
If your belongings are lost or destroyed by a wildfire, your personal property coverage may help pay to replace them. It is a standard part of most homeowners’ and renters’ insurance policies.
You should be able to find your personal property limits and endorsements on your policy’s declarations page. When you purchase your policy, your insurance company will give you a copy of this document, so read it carefully.
Your personal property coverage includes furniture, clothing, electronics, and other items in your home or elsewhere. It is usually included in your total homeowners’ or renters’ coverage limit, but you can add extra coverage to protect certain high-value items.
A completed inventory of your belongings is an excellent way to know exactly how much personal property coverage you need. In addition, it helps you to see how much it would cost to replace all of your belongings if they were damaged or destroyed in a fire.
Some policies include loss-of-use coverage, which pays for hotel bills and other expenses incurred while your home is uninhabitable due to a disaster. It is a worthwhile addition to your homeowner’s insurance, especially in areas prone to wildfires.
Educating yourself about how to protect your home against wildfires and maintaining a defensible space around your house that will act as a fire-resistant barrier is essential. It includes removing dead trees and brush to create more defensible space and regular grass-mowing that limits the fuel that can burn in your yard.
Additional Structures Coverage
Your home is protected with dwelling coverage, as are the structures on your property, like fences, sheds, and pool houses. These are safeguarded under other structures’ range, which typically equates to 10% of your home’s dwelling coverage limit.
Other structures coverage is a built-in part of most homeowners’ policies. It’s designed to cover many risks, including fire and theft.
But it’s also not meant to cover standard maintenance tasks, such as replacing shingles on a detached garage or replacing a rotting fence. Instead, it’s intended to provide a safety net in case a big problem strikes unexpectedly, such as a wildfire.
Another benefit of other structures’ coverage is that it covers the structure itself, not the items inside. That means if your shed is damaged by fire, it will be rebuilt rather than the things you store in there being ruined.
If you lose your home due to a wildfire, other structures coverage can help cover the cost of temporary housing and food. Loss of use coverage, a separate part of your policy, can also help you get by while your house is being repaired.
Other structures’ coverage typically comes standard with most home insurance policies, but you can upgrade your protection from actual cash value to replacement cost coverage.