Is Your Home Adequately Insured for a Loss?

Yeah, I know. It’s not a fun thing to think about. Let’s flash to a hypothetical.

You’re a homeowner – maybe one just settled in to a new home; your dream home, even, and one you’ve been socking away money in your bank for, for years. You wake up on a typical Saturday, coffee in hand, about to take your jack russell terrier Scout out for a walk. Then, the unimaginable happens. An avalanche! Hail! The slugger on the little league baseball team practicing the next field over comes to bat! In other words, damage to your home.

So what’s the first thought that comes to mind? Likely – am I properly insured?

At Pure Risk Solutions, we would be happy to be your peace of mind when answering that question. If you call me, Laura, or my fellow home insurance savant Dave Godel, one of us can give you an assessment of your current policy, and importantly – let you know how the new Colorado government reform act will affect it.

In case you were unaware, the Colorado Homeowner’s Insurance Reform Act (HIRA) was passed in May 2013. Generally, it’s meant to protect homeowners if their house is seriously damaged or destroyed. That said, policy rates may go up.

Here are some of the highlights:

• Initial changes kick in January 1, 2014
• Replacement cost policies (cost to replace property in the same location, with comparable material and quality), must include an option for:
• Extended coverage of at least 10% of the additional cash limit available in a rebuild event
• Ordinance and Law coverage of at least 25% of the additional cash limit available in a rebuild event
• Replacement cost policies offered by insurers must include at least 12 months of Additional Living Expenses (ALE) coverage, with the option to purchase for a full two years
• Additional time (> 1 year) to file for a claim

With due apologies for all the insurance jargon, we encourage you to ask yourselves if know the answers to the following questions. If you don’t know the answers, your current agent has not been doing his or her job.

How did you determine the replacement cost for your home when choosing a policy?

If your current agent has not run replacement cost estimates for your home, please call Pure Risk Solutions today and allow us to do so for you. It is the crucial piece of information to have in the event damage occurs.

In the event of total loss where you’d have to live elsewhere, have you done an inventory of your home’s contents?

Without the correct inventory information, the most you can receive is 25% of the coverage amount of the lost property.

Are you aware of property sub-limits?

Possessions like jewelry, guns, and fine arts have a maximum replacement value you can receive for each item, unless they are listed individually on the policy. Call PRS for a proper assessment of items valued at over $1,500 (the sub-limit).

Are you aware of Ordinance and Law coverage?

Well, technically – yes, the definition is linked above. In a nutshell, in the event of partial home destruction, a building inspector may require demolition of the undamaged portion of a home to bring it up to code. The undamaged portion would not be covered under your policy unless you had adequate Damage or Loss insurance. PRS can help you determine the total value you need to insure your home to avoid a situation like this.

To sum it all up, there are a lot of changes coming with HIRA. And while you can hope to not have to worry about them, you’ll be happy to know you have, if the unimaginable ever were to happen to your home. Please contact me, Laura Stanko Joy, your helpful local agent at Pure Risk Solutions at laura@purerisksolutions.com or (866)738-2180 for answers to the questions above. Happy Holidays from our family to yours!