AAA Oregon: Droughts Conditions Increasing Fire Threat for Homeowners

April 25, 2005

This week, Oregon Gov. Kulongoski has proclaimed Oregon “A Home Fire Safety State.”

Yet, as warmer days approach, the impending drought and associated wildfire danger loom large. Already, there’s been much information in the news about preventative steps homeowners can take to safeguard their property from the threat of wildfire. But homeowners must also take steps to ease any financial impact should their property sustain fire damage.

According to Clark Cosart, AAA Oregon/Idaho vice president-Insurance, there are three key steps homeowners should take now to protect their assets:

1. Conduct a home inventory

Statistics from the National Insurance Industry show that fewer than 20 percent of homeowners have an updated home inventory. Those who do have a thorough inventory have a significantly easier time settling their claim in the event of a loss.

Creating a written inventory of personal items you own, such as furniture, clothing and electronic equipment can be a time-consuming process, but an inventory will help you and your agent accurately determine the amount of insurance you need to replace your assets, settle your claim faster, and verify any unreimbursed losses for your income tax return.

“It’s especially important to update your inventory and your insurance following a marriage, the birth of a child, or a home renovation project,” said Cosart. “Anything that adds assets to your house or changes the value of your property should be taken into account on your homeowners insurance coverage.” Most importantly he adds, be sure to store your inventory in a safe, secure location such as a safety deposit box.

2. Know exactly what the policy covers

Surveys show 67 percent of Americans feel they have just about the right amount of insurance. Yet 62 percent also admit that they don’t understand their policies very well. “It is critical to understand what your homeowners policy covers — and what it doesn’t,” said Cosart. “For example, most policies limit the amount recoverable on certain types of property such as jewelry, silverware, stamp or coin collections — even computers and software. However, coverage is generally available by adding special endorsements to your homeowners policy.” Carefully review your current policy and talk with your insurance agent so you’ll now exactly what your policy covers.

3. Be sure to have enough coverage

“Not having enough coverage on their house and personal property is one of the most common mistakes a homeowner makes,” says Cosart, who urges homeowners to thoroughly understand the answers to the following questions:

— Do I have enough insurance to rebuild my home?

— Do I have enough insurance to replace all of my possessions — and what losses are not covered?

— Do I have enough insurance to protect my assets?

“Especially given the outlook for wildfires this summer, we want homeowners to take appropriate precautions to ease the financial impact of potential damage to their property,” added Cosart.

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