An insurance policy, magnifying glass and money on a table

The Marshall Fires: Do you have adequate insurance coverage?

In Buyers, Homeowners, Sellers by Doug Phelps

The nation watched as, just before the start of the new year, the Marshall Fires started as a grassfire and ended up burning over 6,000 acres and causing hundreds of millions of dollars in damage.  Besides being right around the holidays, the Marshall Fire was especially devastating as fires that large usually don’t happen so late in the season in Colorado.  The Marshall Fires were shocking as, those who are from Denver will be able to tell you, Boulder County is not far into the mountains but instead less than an hour drive from the city.  Because of the population, many people lost their homes and were displaced and left with nothing because of the fast spreading fire.  

Boulder County is a fairly affluent district in Colorado and most homeowners had what they thought was adequate insurance coverage but as property values have rapidly increased, many homeowners are discovering that they are not covered for the full costs.  For insurance holders, it’s a nightmare to discover that even though they are covered, it’s not enough to replace everything.  Many local businesses, as well as large charities have been raising money for those who were impacted by the fires to try to cover the costs as people piece their lives back together.  In the aftermath of the tragedy, this brings up an extremely important lesson for homeowners. Below are important questions homeowners need to think about compiled from local news and insurance sources:  

What is the first thing to do after a fire?

Obviously, the most important thing to do is to make sure you and your family are accounted for and they are OK.  If anyone needs medical attention, even if it seems minor, please seek it just to be cautious as adrenaline can make you feel fine even when you’re not.  Next, contact family and friends as they will be waiting to hear from you and they’ll want to know you’re OK.  Finally, you’ll want to contact your insurance company and they can help you with next steps like filing a claim and getting you set up in temporary housing or a hotel. 

Doesn’t homeowners insurance already cover fire?

Most homeowners insurance already has fire coverage built into the policy but more can be added, and should be added, especially if the home is located in an area of fire risk. 

How can I tell if I have enough insurance?

This is a great question, and part of the reason that some coverages fell short in the Marshall Fire.  According to an article on Colorado Public Radio News, Colorado Insurance Commissioner Michael Conway urged homeowners to continue to work with their insurance companies even if the initial offer was low, or if homeowners were under-covered.  Every policy is different, and some homeowners had more coverage than others.  Another issue the homeowners in Boulder faced was the issue of appreciation and increasing property value which also left people under-insured without them knowing it.  With COVID-19 and ongoing supply chain issues with everything from lumber to furniture, homeowners who are trying to replace their items and rebuild their homes are having to wait longer and pay more for items.  And payment for policies may cap out at a certain amount, ignoring the quick appreciation of things right now.  It’s a tricky scenario and something all homeowners need to be aware of.  Homeowners in Boulder are encouraged to keep working with their insurance company, especially because of the unique circumstances. 

What do homeowners need to know about insurance and increasing property value?

As a homeowner, know that your policy may not cover the current cost of your home or items if they have appreciated quickly.  It’s important to understand your policy and coverage.  When an insurance company pays out on a claim, they account for the items and the cost of the rebuild and cut homeowners a check but that amount still may not cover everything.  Homeowners need to make sure they are protected fully, especially as home values continue to rise so quickly.  

Do you know if you have adequate insurance on your home?  Are you in the market to buy or sell your home?  Call and text me at (720) 323-4176 or email me at [email protected]

Subscribe To Doug's Blog