The Station wildfire in Los Angeles County burned more than 250 square miles of land and destroyed at least 82 homes.
Almost 6 months later, it has created even more damage due to the mudslides in some affected areas.
While those affected by the fires are still reeling from the shock of their losses, they may be in for another surprise.
They may find out that they were not properly insured.
California Courts have held that insurance companies and insurance agents do not have an obligation to make certain property owners have sufficient insurance coverage for all the risks that they may face.
It is YOUR responsibility, as a property owner, to make sure that your policy covers the risks that you face in your area.
Making the assumption that you are covered could be a very very costly mistake.
To make certain their insurance coverage is sufficient property owners should review their policies, or have them reviewed by an attorney, and to check for the following items: Policy Limits - Make certain the policy limit for Building Coverage is appropriate.
Verify the policy limit for Building Coverage would be sufficient to rebuild the structure in compliance with the current structure code in the event of a total loss.
After the wildfires in 2003 and 2007, many victims in Los Angeles and San Diego counties discovered that because of increased building material costs, and rising labor costs, their policy limits were not sufficient to reconstruct their homes.
Even if your policy has guaranteed replacement coverage for the building, the insurance company may have capped the coverage at 125% of the stated policy limit.
You should discuss your limits with a local contractor, and make sure the limit is sufficient to rebuild.
Many contractors will provide this information over the phone.
Other Structures - Make certain all the separate structures on the property such as garages, swimming pools, or storage sheds are covered by the policy.
Some policies do not include these structures under the standard Building Coverage.
Also make sure the policy provides guaranteed replacement cost coverage for these structures.
Personal Property - Many insurance policies only cover the buildings and other structures, and do not provide coverage for personal property.
Make certain the policy provides coverage for all personal property owned by you if you live at the property, and if you are a landlord make sure the policy covers items such as refrigerators or other appliances, ladders, tools, gardening equipment, or other items used to maintain the property, and furniture or other items used to furnish the units.
Make an inventory of the personal property at the building.
If possible, photograph or videotape the personal property items to demonstrate they are kept at the building.
Loss of Rents/Additional Living Expenses - Make certain the policy provides for additional living expense or loss of rents coverage in the event the property cannot be occupied because of a loss.
In certain instances it can take several months to fully repair a building due to fire, water, or earthquake damage.
Many insurance companies now offer this coverage for a period as long as 2 years from the date of loss.
Liability Limits - Make certain the liability limits are sufficient so you don't pay out of your own pocket for damages or attorney's fees in the event of a lawsuit.
Liability coverage tends to be one of the least expensive coverages to upgrade.
Many times it can be relatively inexpensive to raise the limit or obtain an umbrella policy.
Talk with your financial advisors, property manager and lawyer about whether your current liability limits would protect you and your personal assets.
Umbrella Policy - Umbrella policies provide an additional layer of liability coverage known as excess insurance.
If you have umbrella coverage, make sure the umbrella coverage also applies to your investment property.
A personal liability umbrella policy issued to you individually may not apply to investment properties you own through a corporation, limited liability company, or partnership.
In addition, review the umbrella policy's limits and determine if you need to raise the limit.
The cost to raise the limit may be relatively inexpensive when compared to the protection it would provide.
Worker's Compensation Coverage - Check your policy to determine if it offers worker's compensation coverage.
You may need this coverage if you employ anyone to work for you at your home or other property.
Proper Parties Should Be Named in the Policy - Make certain the appropriate individuals, corporation, limited liability company, or partnership that owns the property are named as insureds in the policy.
All appropriate individuals should be named as insureds, and their names should be spelled correctly.
If a building is owned by a corporation, limited liability company, or partnership, make certain the insurance company has listed the right entity as the named insured in the policy.
Also, most lenders and property management companies require they be named as additional insureds in apartment policies.
Make certain the insurance company has named the lender, property management company, or any other appropriate party, as an additional insured.
Most insurance companies do not charge extra premiums for listing additional insureds in a policy.
Taking the time to make certain you have the appropriate insurance coverage will protect you in the event of a loss.
In addition, most agents are happy to schedule insurance check-ups with clients.
Take advantage of this service, and have your agent schedule you for an insurance check-up at least once a year.
These insurance check-ups can be "life-savers" for you and your real estate investment.