Summit Insurance Advisors
by Michael Harbron on Aug 30, 2022
It’s getting hotter across most of the U.S., and that means an increased risk of wildfire. The western part of the country is at the highest risk of wildfire due to dry, arid conditions. These fires pose a serious risk to your personal property, including your home. You will need a strong home insurance policy with wildfire coverage to recoup your investment if a fire damages your home. Learn how wildfires play into home insurance in Pheonix, AZ to see if your property is protected.
Does Home Insurance Cover Wildfires?
Yes, a homeowners insurance policy will cover damage due to a fire, including a wildfire. The policy should come with benefits that cover the cost of repairs to your property as well as money to replace any damaged personal property. You may also qualify for cost-of-living assistance if you need to find a temporary place to live while your property is being repaired.
Go through your existing homeowners insurance policy to see what kind of benefits are included.
The benefit that will help you pay for any repairs to your home in the event of a wildfire will be listed under “Dwelling Coverage.” This coverage will go towards all structural repairs, including attached structures such as garages and decks. The policy limit is capped at the estimated cost to rebuild your entire home based the local cost of labor and construction materials.
“Other structures” separate from your home, such as a shed or detached garage, are covered by a percentage of your dwelling coverage limit. If you have a 10% rate for “other structures” with a $300,000 policy limit, you will have a $30,000 limit for these structures.
Keep track of how much dwelling coverage your policy provides. You will need to use this money for building materials and construction costs, but the price of these materials can vary widely based on demand. They may also be hard to find if large sections of the community are damaged in the fire as well.
Personal Property Coverage
The policy will also include personal property coverage, which covers replacement and repair costs for your appliances, electronics, and other valuables. Your personal property coverage is typically limited to anywhere between 50% to 70% of your dwelling coverage. If you have a $300,000 limit with a 50% personal property rate, you will receive up to $150,000 to repair or replace your personal belongings.
Lawn and Plant Coverage
The shrubs, trees, and bushes and your property are also covered by a percentage of your dwelling coverage, usually around 5%. For a $300,000 limit, you would receive$15,000 to replace your plants.
Loss of Use
If your home becomes unlivable after a wildfire, you may also receive additional living expenses to stay at a nearby hotel until the repairs to your home are complete. This may include laundry services and pet boarding fees. You may even be able to claim these expenses if you are ordered to evacuate but the fire never reaches your home.
The outbreak of a wildfire can be devastating, and your current homeowners insurance policy may not be enough to pay for all the costs associated with rebuilding your home. If you are concerned you will need even more money in the event of a wildfire, you can add an extended or guaranteed cost coverage to your policy. The extended policy option will increase your dwelling coverage by a certain percentage, such as 25%, to give you more money to work with during the recovery process. The guaranteed cost coverage ensures that you will be reimbursed for 100% of your costs regardless of the price. However, increasing your coverage will increase your monthly premium.
Every home and property owner should be concerned with wildfire damage. Contact the professionals at Summit Insurance to learn more about your options for home insurance in Pheonix, AZ.
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