What your fire insurance and FEMA can do
Fires sweeping across the Southland should serve as a reminder that everything we value is at risk. The moral: Be prepared.
Although some things are impossible to replace, for everything else there’s insurance. Here’s a primer on fire coverage.
What’s covered under my
policy?
The first line on your homeowner’s policy “declarations” page shows how much coverage you have. This is the maximum amount the insurer would pay to replace the structure of the home: the walls (inside and out), the roof, windows, plumbing, electrical wiring, heating and air conditioning equipment, and built-in appliances and cabinetry.
Usually you can determine how much coverage you need by multiplying the square footage of your home by $100 to $200. The more custom details you have in your home, the more it will cost to replace.
Many policies have “extended” or “guaranteed” replacement cost coverage, which can boost the structural limit coverage above the figure on your declarations page. It’s common for insurers to offer 25% to 50% more coverage through replacement cost provisions.
Does my policy cover my guest house and garage?
A detached garage, guest house or shed on your property would be covered under a section of your policy headed “separate structures.” This coverage is usually limited to 15% to 20% of the limit for the main dwelling. If that’s not enough to replace your elegant guest house, call your agent to buy a rider or boost the overall coverage.
Does my policy pay to put me up in a hotel while my house is being rebuilt?
Better than that. “Loss of use coverage” will pay to put you in a home similar to the one you lost. Some insurers limit how much they’ll pay under this provision.
What about my belongings?
The standard policy automatically covers your belongings in your home -- usually up to 50% to 75% of the dwelling coverage. Certain categories of items have limits on how much the policy will pay. If the limit would make it impossible to replace a prized possession, ask your insurance agent about buying a rider. Riders can cover individual items, such as jewelry, furs and artwork.
Which items are subject to separate limits?
Here are some common items and their typical limits. If you have expensive chandeliers, antiques or other unique and costly items, you should ask whether they would be adequately covered under your policy.
* Cash: $200.
* Collectibles: $100.
* Stock, securities and manuscripts: $1,000.
* Jewelry, watches and furs: $1,500 per item, $2,500 total.
* Silverware, tea sets and trophies: $2,500.
* Home computers: $5,000.
* Bicycles: $1,000 per bike, $2,500 total.
* Compact discs and electronic games: $1,000.
How do I prove what I lost?
Create a home inventory showing what your property is like and what is in it. Because listing everything can be time-consuming, experts suggest creating a video inventory, starting on the outside of your home, panning inside each room to show the curtains and furniture and zooming in to record the contents of closets and drawers.
What’s not covered?
Most policies pay to replace the home as it was -- even if it did not meet today’s building codes. If your house is more than 20 years old, check your policy to see whether it covers building code upgrades. If not, it can be added.
Where should I keep my policy and inventory?
Put them in a bank safe-deposit box or give them to a close friend or relative who doesn’t live nearby.
What if I don’t have fire insurance?
You may be able to get help from the Federal Emergency Management Agency. To qualify, you must have a loss to your primary residence and live in an area declared a disaster by the president. If your home isn’t gone, but you can’t get to it because of disaster, you may qualify for aid.
What kind of assistance does FEMA provide?
There are three types:
* As much as $40,000 to replace clothing, furniture, cars and appliances.
* Housing assistance of up to $200,000 to pay for temporary housing and to repair damage to your primary residence.
* As much as $1.5 million to help a business recover from physical and economic injury.
Most of this aid is in the form of low-interest loans. If you have no other borrowing options, the rate on the loan won’t exceed 4%. If you have other borrowing options, the rate is capped at 8%.
How do I reach FEMA?
Call (800) 621-3362.
