Some Californians will say that California living is a state of mind. When you think of California living, most think of vacations at picturesque beaches, snow capped Sierra Mountains and the deserts of Palm Springs. It’s one of the few places in the world that can go from sandy beaches to mountainous terrain in a matter of minutes, and also has a dry desert climate. With this beauty comes a high cost of living, a state that has fiscal difficulties, and continuous and real threats of earthquake, fires, floods, winds and mudslides.
Recently, the California Department of Insurance issued a study regarding homeowner premiums and the trends over this last decade. The report concluded that:
Overall, total written premiums have been generally increasing. This can be attributed to the rising cost of building/rebuilding a structure and/or the growing replacement cost for personal property contents. Consequently, average premiums are rising from year to year. In addition, California is experiencing a shift from lower amounts of insurance to higher amounts. This substantiates the realization of the importance and increasing need for sufficient insurance protection.
As we look ahead at this year, many homeowners are taking into consideration that a major earthquake is statistically overdue. A recent report from the National Interagency Fire Center Predictive Services concludes that wildland fires are more likely in 2012 due to the dry weather status, a condition made worse by the state’s failure to remove dry vegetation and brush over the last year because of budget cuts.
Homeowners must be aware that being underinsured can create a terrible financial burden to contend with at the time of a loss. Protecting your most important asset means making sure your policy covers the true cost of rebuilding, taking inventory of your assets, and devising a way to properly document your potential claims with your insurance company before the loss happens.