Your success is reflected in your lifestyle: extravagant vacations, impressive cars and – of course - luxury homes. However, weather patterns are changing, and you may find that the real estate locations you once considered safe might now be in harm’s way.
Wildfires are on the rise, whether they occur naturally from a lightning strike or as a result of an unattended campfire. While they may not be your fault, you’ll want to take proactive risk mitigation measures to reduce potential losses.
To make matters even more challenging, many insurance carriers are exiting geographical markets making it increasingly difficult to find coverage at the levels you need. For example, if your home is non-renewed, you might be forced to buy policies that cost more but offer less protection. Worse yet, your policy might be cancelled altogether leaving you scrambling to find alternatives.
COVERAGE SOLUTIONS
Especially in locations such as California, Colorado, and Arizona (but by all means not limited to those three states), Lockton is seeing a trend toward non-admitted insurance markets. While some states are creating emergency insurance pools, non-admitted markets often offer a better solution for luxury homes with custom features.
You are probably most familiar with admitted insurance carriers that are state-regulated and subject to financial solvency regulations that ensure they fulfill obligations to policyholders. Unfortunately, admitted carriers are becoming increasingly cautious about the types of risks they insure and the limits they are willing to fund.
Non-admitted carriers, also known as surplus lines, are less regulated and provide coverage for risks that admitted carriers might decline. They offer impressive solutions for risks that may otherwise be difficult to insure, such as homes near previous wildfire burns or far from fire stations. Because they are not bound by state regulations, they have more flexible underwriting guidelines which can lead to innovative solutions and competitive pricing.
The drawbacks to non-admitted markets should be noted, but sometimes these surplus lines are your best (or only) option. Because they operate with less regulatory oversight, you many have minimal recourse if there is a dispute. Additionally, policyholders may not have access to state guaranty funds in the event of insolvency.
It’s important not to wait until your primary or vacation residence is in the path of a firestorm. Lockton is here for you throughout the year should you have questions about insurance coverage trends, risk mitigation strategies, or details about your current policies. You can be confident that we leverage our relationships with top-rated admitted and non-admitted carriers when making recommendations for your unique circumstance.
DOCUMENT, DOCUMENT, DOCUMENT
Many carriers have standard loss guidelines they use to determine settlement amounts after a fire. Unless you can substantiate higher requested amounts, you may have a difficult time fully restoring your lifestyle in the event of extensive damage.
Lockton can recommend local videographers who are trained to document luxury homes inside and out. This photographic evidence is indispensable during the claims process and will allow Lockton to negotiate from a much stronger position. As an additional safety measure, keep copies of this material in multiple places, such as a bank safety deposit box or with a family member. Photographs and film documentation should include:
Exterior: custom landscaping, architectural features, upgraded materials, and outdoor furniture
Dwelling: custom upgrades and decor, high-end appliances, and upgraded materials. Make sure to document your garage or unattached structures.
Possessions: in addition to room overviews, include evidence of the contents of every closet, cabinet, and drawer. You will be amazed at how much you forget until you have to repurchase it.
Collections: having a professional stage and videotape your prized collections will help carriers reach their decisions faster. On a related note, keep your appraisals up-to-date. Precious metal prices continue to rise, artists retire which increases the value of their work, and memorabilia markets fluctuate.
Don’t forget to document your luxury or recreational vehicles. If they are damaged during a wildfire, you’ll want a record of upgraded features or interior contents.
For more information on steps you can take to better protect your homes and possessions in advance of wildfire season, download our handy preparedness checklist (opens a new window).
WILDFIRE AFTERMATH
When homeowners think of fire, many focus on heat-related losses, but it’s usually far more complex. Smoke damage can be extensive, and water from firehoses tends to cause secondary harm. You never know what you are going to encounter when you return to your home after a firestorm.
You can plan ahead now for some items you may need later, and add them to your emergency evacuation kits or bugout bags:
Because evacuations happen quickly, you likely won’t have a full wardrobe at your disposal. Pack pants and long-sleeved shirts to provide a layer of protection as you assess interior damage. Boots or heavy-duty work shoes are ideal to protect you from nails, broken glass, and wiring hazards.
Include high-quality masks and work gloves. Soot, dust, ash, and chemicals could make the air inside your home unhealthy until it’s been fully ventilated. Purchase chemical-grade masks to protect your lungs and heavy-duty work gloves so you can relocate items safely.
Whether you are temporarily staying with family, friends, or in a hotel, being able to charge mobile devices is critical to your ability to communicate with others and document any losses. Be sure to purchase and include a few extra power banks and charging cables.
Download the carrier app to your smartphone so you can see real-time updates to any claims you might need to file.
WHAT DO I DO NOW?
Call Lockton. Don’t feel like you have to navigate through a crisis alone – we’re here to help. The most common question we hear after a wildfire is, “What do I do now?” Our dedicated claim team helps our clients put together a customized game plan and will explain step-by-step actions you need to take. Our team has years of experience supporting clients during crisis situations and will make sure you feel confident moving forward.
To report a loss to your home or contents, Lockton’s personal lines claim team can be engaged 24/7 at prsclaims@lockton.com.
Our concierge client service includes managing your claim from beginning to end. First, we’ll work with you to file your claim and provide you with regular updates so you will know exactly what to do and when. Then, we will communicate and negotiate with carriers on your behalf, and work to achieve an optimal settlement.
In addition, we can help you secure temporary housing, car rentals, luxury home fixture restorers, appraisers, and more.
Lockton is here for you in the moments that matter.
The information provided in this article is for educational purposes only and should not be considered professional advice. Please consult with a Lockton representative for information regarding specific insurance products and services.