Insuring Your Property

The possibility of losing a home to fire is far greater in the mountains than in city communities; therefore, the cost to insure is higher. Other details, such as the location of trees and shrubs, the material of the structure and type of roof, are used to determine the risk class.

Insurance companies warn customers living in wildfire-prone areas to maintain defensible space around their home or risk losing their insurance. What can you do to reduce your home’s risk from fire? Don’t have fuel (wood piles, dead trees, low-hanging branches) close to your house. Your insurance policy can be affected if your neighbors don’t remove their dead trees. Insurance can provide some financial security, but fire prevention should be your most important concern.

Also consider flood insurance. The removal of thousands of dead trees has changed the ground, increasing the chance of flooding. The lack of trees could also be increasing our ground water and the possibility of flooded crawl spaces and basements could increase.

In low-snow winters, there is little insulation provided by the snow, and pipes can freeze and burst. The water damage can be incredible! Make sure your insurance policy covers damage caused by water.

If you live in a condominium building or have a homeowners association, know what the association is responsible for and what you are responsible for. Different homeowners associations use insurance in different ways. The effect of the association insurance policy depends on the policy and association bylaws. In most cases, the insurance covers reconstruction of the bare walls, the building, wiring and plumbing. Other items including carpets, cabinets, and light fixtures are left to the unit owner to replace with their own homeowners insurance policy. There are homeowners association policies and condominium association policies which vary in coverage. If the unit owner doesn’t have individual homeowners insurance, then the association may be liable for damage but can sue the unit owner for costs. Unit owners should be aware of what the association policies cover.

If you rent your home, you need to have renter’s insurance. Renter’s insurance protects against the damage or loss of personal property when you rent an apartment or house. Your landlord may have insurance that protects the physical building in which you live, but this insurance will not cover your personal property. In fact, it’s not at all uncommon for landlords to require the renter to purchase renter’s insurance. This protects both landlord and renter from the possibility of a lawsuit.

Insurance Tips

1. Get everything in writing, including what will be covered by insurance, what won’t be, and why.
2. Ask what your policy doesn’t cover. Flood? Mud slides?
3. Make sure your insurance agent is notified of any improvements or additions to your home so that coverage is adequate.
4. Take photos of your home and its contents. Make a CD and give a copy to your insurance agent, or store it off-site in a safe location.
5. Understand the difference between “actual cash value” and “replacement coverage.”
6. Coverage on storage units can be extended from a renter’s or a homeowner’s policy.
7. If you have to make a claim, walk around with the insurance adjuster and make sure you understand what will be covered. Make sure they understand the situation. Be involved.