Just over on month ago the Marshall fire devastated parts of Boulder county in Colorado. Over 1,000 homes and business were lost making it one of the most devesatating natural disasters in the history of the state. The frightening aspect is how quickly the situation developed and escalated due to the extreme wind and dry conditions. Luckily the police and fire department were able to evacuate residents and minimize the loss of life. However, the loss of homes and businesses was severe.
The Good News:
The good news, besides the minimal loss of life, was that most business and homeowners had enforced insurance policies to help them rebuild. The clause in the insurance policy that defines the dollar amount insurance will cover is "Replacement Cost". When you have a policy that protects the premises you will have a certain amount money that the insurance company will give you to replace your loss....but if you're not careful that can cause some financial problems in the case of a partial of total loss.
The Bad News
Using replacement cost is usually a worst case scenario for when something devastating happen to your property. What a large number of business and homeowners have found is that the replacement cost value that they have enforce with their insurance policy is way too low and will not cover the current market conditions to replace heir building, creating a large financial burden.
The Solution
The solution to this problem is fairly simple, make sure your coverage for your replacement cost is up to current market conditions. It is always a good idea to review what you have in place to make sure you are covered if something goes wrong... that's exactly why you have insurance. Most likely you will have to pay more for you extra coverage, but it could save you financially in a big way.
If you need a quick look to make sure your replacement cost meets the current market conditions (it is most likely not), please contact us an we can give your current policy a quick look and give you options a suggestion to make sure your replacement cost is right for you or your business.