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As California burns, here’s what you need to know about fire insurance

Insurance - 01/09/2018

Most homeowners insurance policies cover fire damage. But heads-up: That’s not the whole story.

Most homeowners insurance policies cover fire damage. But heads-up: That’s not the whole story.
If you live in a high-risk area, such as near a canyon, you may need to pay more for additional coverage.
And if, God forbid, a fire has devastated whole communities, such as what we’re seeing now in Northern California, your home-replacement dollars could be stretched thin as costs soar for everything from materials to labor.
“All those commercials about insurance companies offering peace of mind when things like this happen — those are just ads,” said Amy Bach, executive director of United Policyholders, a San Francisco-based advocacy group.
“In reality, insurance policies are written by teams of lawyers, and it can be rough for homeowners,” she said.
Most homeowners insurance covers both your home and all property within. More than 90% of homeowners buy coverage, according to recent estimates, and as many as 40% of renters purchase insurance for their belongings.
After the recent drought turned California into a huge pile of kindling, insurers racked up billions of dollars in fire-related claims. Some, such as Allstate, stopped writing new policies. Others, such as Farmers and State Farm, became choosier about homes they’d cover.
The insurance industry says it’s ready to handle claims from the fires now raging statewide.

 

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