It's a homeowner's worst nightmare, a house fire or a fierce flood comes through and leaves your house in ruin. It happened to Tom Stobbs. "It somehow came down the culvert." Luckily, he had made it a habit to update his homeowners insurance. So, he was prepared when wildfires whipped through his neighborhood. "About every 24 months I get on the phone with the agent and say here's the deal, I want to make sure I'm covered. He said you're covered. And I was." Unfortunately, some homeowners find that when disaster strikes they are under insured. The cost of rebuilding their home is more than the value of their insurance policy. This means they have to come up with cash to rebuild their home to the way it was before. Homeowners need to remember that it is their responsibility to have enough insurance coverage. A regular conversation with their insurance agent or company is very important. Jeanne Salvatore, Senior Vice President, Insurance Information Institute says, "The three most important questions to ask your agent are: do I have enough insurance to rebuild my home if it's destroyed. Do I have enough insurance to replace my personal property if it's destroyed? And do I have enough insurance to protect my assets if I'm sued." People find themselves underinsured to two reasons: they have renovated their home, built a nice addition that added value to their home, but they didn't buy more insurance to cover it. Or they live where construction costs are very high. When a fire or other disaster destroys their home they find they don't have enough insurance coverage to rebuild. The Insurance Information Institute recommends you work with an independent appraiser, then review your policy to make sure it reflects current construction costs. Candysse Miller of the Insurance Information Network of California says it's critically important that you take a look at your policy every year. Call your insurance agent and make sure that your policy will keep up with you and your home."
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