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'We're Learning From Their Pain': Front Range Homeowners Examine Insurance Following Marshall Fire

BOULDER COUNTY, Colo. (CBS4)- Like Coloradans across the state, Denver resident Sara Henry watched the flames of the Marshall Fire tear through Boulder County subdivisions. Before the fire was out, she had contacted her insurance agent to check on her own coverage.

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"I think I emailed the agent Monday and said, 'Where am I?'"

RELATED: Resources For Marshall Fire Victims

Henry, who lives in the Cherry Creek North neighborhood of Denver, wanted to know if her policy had kept up with rebuilding costs, which she believes have been recently impacted by supply chain cost increases and inflation.

"Sadly, as a result of the Marshall Fire, it brought to the forefront what I needed to do and I needed to do it fast."

After speaking to her insurance agent, Henry decided to increase insurance coverage on her home by about 20% which she says will cost her an extra
$200 annually.

"To me it's an absolute no-brainer to increase coverage," she said. "I certainly don't expect Boulder here in Denver but you just never know. I would rather be over-insured than under, for sure."

Shannon Weston, who lives in Denver's Washington Park neighborhood, said news coverage of the Marshall Fire also got her thinking.

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"I had not looked at my homeowner's insurance since I bought the house 20 years ago. If something catastrophic happened and I could not be made whole, I would be in a lot of trouble," said Weston, who retired from a job with the State of Colorado in 2018.

She contacted her insurance agent and spoke to him for about 15 minutes. She said the next day he told her she was underinsured by about $100,000, so she increased her coverage which actually decreased her annual premiums by about $300 per year. She said she believes improvements she had made on the home, like upgrading electrical systems and replacing the roof, which she hadn't told her insurance company about, led to the premium decrease.

"It also got me to make a mental note that I need to call the insurance agent every five years or so. Rebuilding costs have skyrocketed since the start of the pandemic because of the supply chain."

In Boulder County, realtor Laura Levy said what Henry and Weston have done since the Marshall Fire was spot on.

"If maybe the last time you updated was a year or two years ago, the cost per square foot to rebuild may be a lot higher than when you last updated your policy," said Levy. "Just kind of like getting a checkup, it's a good thing to do even if it's once a year. I would say while people are thinking about it, make it a priority and get it done."

Levy went on to say residents may want to consider increasing their coverage if they have made any improvements or upgrades to their home. She suggested landscaping or hardscaping might necessitate additional coverage.

"If you just spent $75,000 on your kitchen, they need to know that. Share that with your insurance agent right away."

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Levy, who lives in the foothills of Boulder County, suggested running through various scenarios with your insurance agent, like floods or fire, and learning what will and will not be covered. She said even if your home is destroyed, you are obligated to continue making mortgage payments, find out how your insurance policy addresses that. Ask your agent about additional living expenses also known as ALE, she suggested. Those are costs such as hotels, meals, and paying for storage if you are displaced. How long will your policy pay for those things while you are displaced? Most policies should cover up to 12 months of living expenses.

Levy said insurance companies use a formulaic tool to determine rebuilding costs. She said she prefers contacting a local contractor and asking, "If I were to rebuild, about what is the per square foot cost?"

Following the Marshall fire, Levy followed her own advice, contacting her insurance agent and determining she was underinsured by about $50 per square foot. She increased her coverage to make up for the difference.

"Honestly, I would rather sleep well at night and pay higher premiums," she said.

  • Additional Information:
    Take pictures and videos of the inside of your home. Go from room to room, open cabinets , drawers and doors. Show the garage. If something catastrophic happens, you will have a visual reminder of what was in your home
  • Keep receipts. They can help you recall what you had in your home and help if you need to make a major claim
  • If you are a renter, get renters insurance. It is inexpensive and can cover your belongings and pay for lodging if you are displaced.
  • An annual insurance review is essential, according to experts
  • Consider replacement coverage- This is insurance that pays the policyholder the cost of replacing the damaged property without deduction for depreciation but limited to a maximum dollar amount
  • Extended replacement cost- An extended replacement cost policy is one that covers costs up to a certain percentage of the limit(usually 20%). This gives you protection against such things as a sudden increase in construction costs
  • Check the value of your insurance policy against rising local building costs each year. Ask your agent about an 'inflation guard clause'. This automatically adjusts the dwelling limit when you renew your policy to reflect current construction costs in your area.

LINK: Rocky Mountain Insurance Information Association

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