Given the California fires over the last few years, one of the largest challenges was whether the homes were adequately insured. Recent surveys of fire victims in California showed that almost 50% of homes were underinsured, meaning they could not be rebuilt for the amount the home was insured for. The most common reason for this coverage gap is the home features not being accurately reported to the insurance company.

All insurance companies use a third-party reconstruction cost calculator to develop a minimum replacement (rebuild) cost of your home. This calculator is only as good as the data that goes into it. For example, if you have 9-foot ceilings throughout the home, and the insurance company shows 8-foot ceilings, the calculator would yield an amount lower than the actual cost to rebuild. For comparison, on a 2,300 square foot home, this ceiling difference would cause up to a $25,000 gap in rebuild cost. A kitchen remodel where you updated cabinets and countertops also could have been missed, widening the coverage gap.

We recommend that you ask for a detailed report of your home’s features in the insurance company’s system. We can review this report with you to help make any corrections or updates. This will help ensure that you are properly insured.