|Los Angeles – August 17, 2009 As wildfire season begins in California, homeowners need to take action to ensure their homes are adequately insured and that their families protected in case disaster strikes.
The first fires have already started, leading to evacuations and putting homes at risk. According to a 2008 survey by Marshall & Swift/Boeckh (MSB), 64 percent of houses in the United States are under-valued for insurance purposes. Of those, the average homeowner has enough insurance to rebuild only about 81 percent of his or her dwelling.
That means if a home burns, many families will not have enough insurance to rebuild fully. The homeowner themselves will have to make up the difference between the repair cost and the amount of insurance they carry.
One way homeowners can avoid underinsurance is to work closely with their insurance company or agent to establish a “total component” estimate of replacement cost for their home This means updating coverage amounts based on specific characteristics of each dwelling localized to the community where the house is located. This is shown to be the best protection against uninsured building loss according to “best practices” strategies published by the State of California.
“Homeowners in disaster-prone areas who haven’t had their homes evaluated within the last year should do it now,” stated MSB President Peter M. Wells. Since many Californians have remodeled and upgraded their homes, having a current cost estimate performed is critical to keeping insurance at the right value.
At the very least, Marshall & Swift recommends that homeowners visit the do-it-yourself valuation website, www.accucoverage.com and spend about 10 minutes to complete an up-to-date home valuation survey for their property. This estimate gives updated replacement cost values based on the same data used by major insurance companies and is an insurance ready report. Homeowners then can provide the accucoverage.com report to insurance agents for a policy adjustment.
In April 2009, ABC TV news featured accucoverage.com in “Preparing Your Home for Disasters” (http://abclocal.go.com/kgo/video?id=6753801). Accucoverage.com has been recommended by the San Diego Union Tribune, Kiplinger's Personal Finance magazine (which named Accucoverage.com one of the “best sites for insurance quotes.”) CNN Money reported: “You can fill in your home's location, square footage, the year it was built -- and get a construction estimate for $7.95 -- at accucoverage.com.” Accucoverage.com has also been cited by MSN Money in their coverage “Is your home underinsured? 8 key tests.”
Homeowners may think falling home values eliminate the need to update insurance coverage. However, homeowners insurance is based on the cost of rebuilding a home after it is destroyed, not market price.
In addition, one of the biggest shifts by insurers in recent years has been the near disappearance of “guaranteed replacement cost” coverage that promised to rebuild a home exactly the way it was, no matter the cost. Most standard policies now provide only “extended replacement cost” that offers up to 25 percent or so more than the face value of the policy if extraordinary events occur. Insurance experts say many homeowners aren’t aware of this shift, and may be greatly underinsured as a result.
“Those who have upgraded their properties should also run a report, and in general homeowners should get in the practice of running an Accucoverage report annually or any time an upgrade is made. A yearly check up should become second nature, like checking your credit rating,” said Wells.
About Marshall & Swift
Marshall & Swift, an MDA business, has been a leading supplier of residential and commercial cost data for the appraisal, assessor and property insurance industries for more than 75 years. The organization is also a major provider of Web hosting, property inspection and related services for property insurers. For more information, please contact Arun Baheti at 213-253-4831 or firstname.lastname@example.org.
MacDonald, Dettwiler and Associates, LLC ( MDA) provides advanced information solutions that capture and process vast amounts of data, produce essential information, and improve the decision making and operational performance of business and government organizations worldwide.
Focused on markets and customers with strong repeat business potential, MDA delivers a broad spectrum of earth and space based information solutions, ranging from complex operational systems, to tailored information services, to electronic information products. More information about MDA is available at the company’s Web site: www.mda.ca.
MDA employs more than 3,300 people in locations across the United States, the United Kingdom, and Canada. The Company’s common shares trade on the Toronto Stock Exchange under the symbol TSX:MDA.