Tag: What Happens If a Wildfire Burns Down Your Home?

What Happens If a Wildfire Burns Down Your Home?: Wildfires have become more common in the last decade, and they are likely to keep increasing in both frequency and strength due to high levels of climate change…

What Happens If a Wildfire Burns Down Your Home?

Wildfires have become more common in the last decade, and they are likely to keep increasing in both frequency and strength due to high levels of climate change. While people around the world have seen the damage these natural disasters do on the news, not everyone is aware of the financial impact such an event has on the residents. If you’re concerned, taking out a high fire risk insurance policy could set your mind at rest.

A high level of insurance can help you to find a new place to live while your home is uninhabitable, keep covering your mortgage payments and repair your property, and replace the personal items that you’ve lost as a result of the fire. While it has been difficult to find great policies in the past, this is changing, and some insurance companies are offering plans specifically aimed at people like you. Let’s have a closer look at insurance and wildfire risk.

What Happens If a Wildfire Burns Down Your Home?

Watching your home burn down because of a wildfire is a traumatic experience. No matter if there is simply some cosmetic damage or the whole property is destroyed, you’ll undoubtedly lose many valuable objects, and you’ll need to look for a different place to live while your home is being re-built. This can be a real problem if you’re not insured, especially as you’ll most likely have to continue paying down your mortgage.

Fortunately, most people have some kind of insurance that can cover the expenses of living in a different place, paying the interest on their mortgage, and replacing the personal property that was destroyed. Policies vary, which is why it’s crucial that you read yours closely and find out exactly which expenses will be covered and which ones you’ll need to pay on your own.

If You Have No Insurance

The vast majority of homeowners have some kind of insurance policy, particularly those who have a mortgage. However, once you’ve paid it off, there’s no requirement to keep your insurance, and some people decide to cancel it. Similarly, there are some people with a mortgage who don’t have a reliable and effective policy. If your house burns down and you aren’t covered, you’ll have to come up for all the costs on your own.

This includes paying off the rest of your mortgage if you still have one. Stopping payments could cause foreclosure and the loss of your home. What’s more, when a natural disaster occurs, your lender will find out that you have no insurance and might therefore choose one for you, often at a higher premium than you would otherwise get. For this reason, being proactive and getting your own policy is always better. 

 

Loss of Use or Additional Living Expense Policy 

Any good insurance company will offer homeowners a loss of use or additional living expense policy, which covers the place you will stay while your own home is uninhabitable. Usually, you will be able to maintain the same standard of living you had previously, so if you lived in a very large home, you should be able to rent a dwelling of a similar size.

Additionally, your policy will also cover additional costs you will incur, such as meals and laundry service. Make sure you keep all your bills and proof of expenses, so you can claim the money back from your insurance.

Dwelling Coverage Policy 

In addition to the immediate need for shelter and necessities, you will also need to continue paying down your mortgage. When you first took out insurance, your property was valued, and you will be able to get this money back. Before making any decisions, remember that the bank will get paid first to prevent foreclosure or other negative consequences. Whatever is left can then be spent on rebuilding your home or purchasing a new one.

Carefully read through your policy to see how exactly dwelling coverage works in your case. Sometimes, it might include some money for closing costs on a new place or a monthly amount that can cover an increase in your mortgage rate. However, dwelling coverage policies are quite individual, so you’ll need to figure out what applies to your situation.

Personal Property Coverage 

The other big consequence of a house fire is that you lose a large part of your personal property, such as furniture, valuables, and day-to-day items. Many policies calculate this as a percentage of your property’s value. For example, if your home is worth $500,000 and your property coverage is 50%, you will receive $250,000 to replace all of your personal items.

Alternatively, the policy might be based on replacement cost or cash value. Replacement cost means that you’ll receive the same amount that you paid for your items when they were new. If you purchased a table for $2,000 twenty years ago, you’ll get $2,000 today to replace it. However, if your policy operates on cash value, you’ll only receive what the table would be worth today if it were sold. This is usually much lower.

Other Avenues for Help 

Whether you have insurance or not, there might be other people you can turn to for help. Family, friends, and unaffected neighbors are often happy to help, and there are certain charities that assist people like you who have suffered because of a wildfire. As an example, the Red Cross often helps people who have been hit by a natural disaster, particularly in an area where this kind of incident is common.

You may also receive some government assistance and benefits, but this will depend on your individual situation. All of these additional safety nets are vital, but they are not as extensive and guaranteed as your insurance. That’s why it’s always important to have a good policy as the first line of defense.

Finding Insurance and Protecting Your Home in a High-Risk Area 

As climate change heats up our environment, the risk of wildfires increases in certain areas of the country, particularly in California. Unfortunately, this means that many homeowners are having trouble finding a good, affordable home insurance policy because the companies are worried about the level of risk they are taking on. They may charge you more, place a cap on the payout, increase your deductible, or simply refuse to cover you.

If you have experienced this problem, you shouldn’t give up just yet. Although there are Fair Access to Insurance Requirements (FAIR) plans for people who can’t otherwise get insurance, they are usually expensive and don’t cover you as well as other options. Instead of using this service, you should look for high fire risk insurance, which is a plan specifically designed for situations like yours.

Choose High Fire Risk Insurance 

Every policy designed for people living in high fire risk areas will include living expenses, dwelling coverage, and personal property coverage. However, your insurance might also encompass some other benefits, depending on what your home is like and which structures you choose to get insured. For example, you might have other buildings aside from your main house, such as a shed, fence, or a detached garage.

Many policies will cover these structures, as well, and some will even help you to replace your vegetation. Trees, shrubs, your lawn, and plants can be included as a percentage of the value of your home, so you won’t have to worry about purchasing everything from scratch. In these ways, insurance specifically for high fire risk areas is tailored to your needs and can help you to get back on your feet much quicker.

Minimizing Your Damage 

No matter how good your insurance policy is, you should always look to minimize your damage and protect your property as much as you can. There are certain strategies you can employ to make sure a wildfire won’t destroy everything you own. Most importantly, you should clear all the vegetation at the edges of your property because this can double the likelihood of your home surviving a fire without much damage.

Try to remove all the flammable objects at the perimeter of your yard, cut down branches overhanging your roof as they could transmit the fire to your building, and clear all your structures of vegetation. You could also join a local group that aims to minimize wildfire damage, as they will have a lot of ideas about how you can best save your property.

Protect Your Home

Living in an area with a high risk of wildfires can be dangerous and challenging, but many people don’t want to leave the home they have lived in for many years. A high fire risk insurance policy can go a long way to alleviating your fears and making sure that you won’t face hardship, even if your home is affected by fires. If you also take precautions such as removing vegetation at the perimeter of your building, you will be very well protected.

In the past, it has been difficult to find a great insurance policy in California, but fortunately, you have options now. Get in touch with us today at Armac Insurance to find out more about the various plans we offer for people in high-risk areas. Our agents will be happy to speak to you about your needs and help you put together the best policy for your home.

Group Voluntary Benefits

Group Voluntary Benefits

Insurance is something that everyone, no matter their life situation, will need. Wherever you live, wherever you work, and whatever your income, it’s vital that you and your family’s health and wellbeing are properly protected. While it’s tempting to save money in the short term by skipping health insurance, you could end up paying more in the long run. However, an attractive alternative can be Group Benefits Insurance, but what is it and how does it work? Read on for our comprehensive guide.


Your Guide to Group Benefits Insurance

What Is Group Benefits Insurance?

Group Benefits is a type of insurance that covers a group of people under one insurance policy. This could be the employees of a company, the members of a society, or a group of professionals who work in the same field. In the past, most people would receive this kind of insurance through their employer. This is often very beneficial to all parties involved, as employers can use their insurance benefits package to attract top talent, while their employees can often enjoy lower premiums.

There is often a misconception that group benefits insurance solely covers health insurance, but other types of insurance can also be offered as part of a group scheme. What is included will often depend on a specific group, but employers are often keen to emphasize novel policies to set them apart from the competition. Often, a great benefits policy can be instrumental in increasing employee loyalty and retention.

Types of Group Insurance Product

Many different insurance products can be offered as part of a group benefits package. It’s often a good idea to consider offering a combination policy, which includes several packages at once. Aside from being a more attractive proposition to potential group participants, while giving you, as the main client, the ease of managing the various policies in one place. Here are some of the most common products that can be offered as part of a group package:

Group Disability Insurance

Group Disability Insurance protects the scheme participants if they become too sick to work through injury or illness. It’s often divided into short and long-term insurance. Short-term insurance will cover the insured if they are unable to work for a short period of time and replace a portion of their income for the period in which they are off work, usually for less than 26 weeks. Conditions that might qualify include the birth of a child, a prolonged illness, or recovery from surgery.

Long-term disability benefits will kick in when the short-term benefits expire, usually after 26 weeks. It’s used for conditions such as debilitating cancer, an accidental injury that prevents work, some mental health conditions, or other illnesses that prevent the insured from working. It’s usually paid monthly, in contrast to short-term cover, which is paid weekly. The amount of time a person can receive it varies but is usually either for a certain number of years until they return to work, or until they reach retirement age.

Group Life Insurance

Sometimes called a death benefit, Group Life Insurance is designed to financially protect a person’s loved ones, known as beneficiaries in the event of their death. It’s often an integral part of a family’s long-term plans. It’s designed to cover expenses such as funeral costs, covering a mortgage or rent, or providing college funding.

Group life insurance can sometimes be combined with an individual’s policy to provide an even greater level of coverage without the insured needing to answer medical questions and providing a level of guaranteed coverage. For employers, having a comprehensive life insurance policy can be hugely beneficial to your employees, who will always appreciate a policy to protect their loved ones.

Group Dental Insurance

Dental insurance can cover costs associated with dental care for the insured and often covers procedures such as routine cleanings, root canal treatments, and fillings. Most dental insurance policies are divided into three categories: preventative, basic, and major. The category a procedure falls into depends on the insurance provider and will determine the out-of-pocket cost for the insured. As an example, a filling might be considered to be basic care, while a bridge would be considered to be major care.

Group Vison Insurance

Similar to dental insurance, group vision insurance helps to round out an insurance package by providing a level of coverage for procedures related to the insured’s vision. For example, it could cover eye exams, glasses, and contact lenses. Most vision insurance covers the cost of routine eye exams and a portion of the costs incurred by prescription glasses or contacts.

Sometimes, an insurance company will partner with a network of providers. In this case, the insured will be required to visit a member of that network. While they can choose to go elsewhere, they will then be required to cover the cost themselves.

Reasons to Choose a Group Benefit Package

Aside from the reasons listed above, there are a host of other reasons that can be beneficial. It’s especially important for employers, as it can significantly reduce costs per employee, and employees will often need to pay less than they would have to otherwise. It also works well with a pension plan, as it can provide a level of pre-retirement security, especially if your employees have a small pension pot.

Additionally, it’s very tax-efficient, as it is often treated as a business expense for the purposes of corporation tax. More than this, however, it can be shown to increase employee productivity by removing sources of stress and distraction.

If you’re considering taking out a group insurance policy, either for your companies employees or on behalf of another group, then be sure to contact ISU Armac today! In addition to bringing the personal touch of an independent and family-owned company, we are also affiliated with ISU insurance services, a national agency that works with over 300 carriers across the country, giving us the reach of a national company beyond our home in Victorville, CA. So don’t delay, contact us today.

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