The 2020 California fire season was one for the history books. The CZU Lightning Complex fire alone damaged nearly 1,000 structures in Santa Cruz County and burned more than 86,000 acres. 585 fires broke out across California from the same lightning storm. With only 50% of our average annual rainfall since then, we are looking at another potentially catastrophic fire season.
With rising (read: completely out of control) construction costs and increased chances of fires and other natural disasters, it is more important than ever to safeguard your property and make sure your home owners insurance is up-to-date and sufficient, should tragedy strike.
So what can be done?
#1) The most important thing that homeowners in high fire-hazard areas can do is increase their defensible space to safeguard their property and also create an action plan in case of emergency. Click here for great information from Cal Fire on :
Creating and maintaining 100 feet of Defensible Space around your home
Using ember-resistant building materials to protect your home
Creating your own emergency supply kit
Developing your family communication and evacuation plans
#2) The other incredibly important piece to protecting your ass(ets) is to make sure your property is adequately insured. Lumber prices alone have skyrocketed 400% in the past year, with no sign of coming down. Covid-19 has sparked unusually high demand for new construction, especially in suburban and more rural areas. This increased demand, coupled with restricted global supply of materials (as well as local supply of qualified skilled-trades workers), has created an imbalance that looks to persist until late 2021 and beyond. Previously, the majority of U.S. lumber was domestically produced. More recently, imports have taken over the lion’s share of supply, which means future prices could be further exacerbated by inflation concerns regarding the U.S. dollar.
Unfortunately many that lost their homes in California in the 2020 fire season are now finding themselves woefully underinsured and unprepared to rebuild amongst increased construction prices. Contractors are now telling homeowners to estimate construction costs at $450-500/square foot to rebuild. This means a 2000 square foot home could cost as much as $1,000,000+ to rebuild. With home prices also steeply on the rise, I have noticed many prospective buyers have started to consider new construction, without realizing that building prices year-over-year have gone up even more dramatically than home prices have.
When was the last time you reviewed the coverage on your homeowners policy to make sure you are adequately insured? Most people obtain their homeowners insurance when they buy a property and don't re-evaluate construction costs ever again. If it has been 1 year or longer, the time to update is now! This is a huge pitfall if you have owned your home for any substantial amount of time, as you may find out too late that you are only insured for a fraction of the cost to rebuild. Talk to your insurance agent today about updating your policy coverage limits. If you are in Santa Cruz County (or the Bay Area at large), click here to schedule a no-obligation review of your home owners insurance.