What to know about home insurance coverage after a major natural disaster
It’s one thing to fix your home after something basic has gone wrong, but it’s a different beast to rebuild and recover after a major natural disaster has destroyed multiple properties on your street, in your neighborhood or across the region
SEATTLE — It’s one thing to fix your home after something basic has gone wrong, but it’s a different beast to rebuild and recover after a major natural disaster has destroyed multiple properties on your street, in your neighborhood or across the region.
Don’t wait until you’re in crisis mode to figure out what to expect. It's important to understand your benefits and rights when it comes to home insurance in the event of a widespread emergency.
Insurance is meant to cover what you lost, but that can mean two very different things.
If you do nothing else, check your policy now to see if you have “replacement cost value” coverage. That’s the comprehensive standard, which will grant you the amount of money needed to get a new replacement of what you lost in case of a major disaster like a wildfire.
If you have “actual cash value” coverage, that means the dollar limits listed are only intended to cover the value of what you lost, which factors in depreciation at the time of the event.
Amy Bach of the consumer advocacy group United Policyholders says the two are apples and oranges in terms of payouts. She describes it this way: “Actual cash value is the Craigslist price. It’s not the replacement cost price.”
From finding a new place to live to buying yourself clothes and toiletries, it’s expensive to survive the immediate aftermath of an emergency, so get familiar with any state laws regulating insurance companies on advanced payments.
For example, California, which has some of the
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