How Should The Recent Natural Disasters Impact Home Insurance in Michigan?

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The U.S. is no stranger to natural disasters.  However, the cumulative damage resulting from Hurricanes Harvey and Irma and the California wildfires is unprecedented.  Insurance claims in the U.S. from Hurricanes Harvey and Irma are expected to reach $55 billion and insurance claims related to the California wildfires are anticipated to be in excess of $6 billion. 

As much as we Michiganders like to compare the Great Lakes to an unsalted ocean, we’re unlikely to ever experience a true hurricane.  And although over 50% of Michigan is covered by forests, it’s unlikely that Michigan would treat us to a prolonged dry spell that usually accompanies a wildfire.  So how should the recent natural disasters impact our insurance here in Michigan?

First, they’re a reminder of the importance of keeping detailed records of your property.  No home is immune to the destruction a tornado or fire can cause.  If your home was entirely destroyed, do you have adequate information about it?  Many people will find details about their home on the Kent County website (click here to search for yours).  However, it’s important to have your own pictures or video to validate your home’s size, build quality, number of bathrooms, etc.

Detailed records of your personal property are equally, if not more, important.  Do you know how many suits you have?  What about the value of your jewelry collection?  In the event of a total loss to your home and everything inside it, a personal property inventory list is crucial.  Your inventory list should include the following for each piece of property: a detailed description, the estimated cost to replace it, and the purchase date.  If you consider that overkill, we suggest keeping detailed records of your most valuable items and recording a video once per year that captures the majority of your belongings.

Second, the recent natural disasters are a reminder of the importance of having the right insurance.  Do you have enough coverage on your policy to rebuild your home if it were totally destroyed?  Most policies include an inflation guard that increases the policy’s coverage each year, but building costs may outpace inflation.  Does your policy provide enough personal property coverage to replace all of your belongings?  Keep in mind that, unless disaster strikes in early November, you likely won’t be getting any Black Friday deals.  Most people assume the personal property coverage automatically included on their policy (which is a fixed percentage of the coverage on their home) is adequate.  However, most claim representatives agree that personal property coverage is one of the two most commonly understated coverages on a home insurance policy (water back-up coverage being the other).

If you’d like to review the amount of coverage your home insurance policy provides for your home and personal property, please let us know.  We’re happy to discuss the specifics of your policy in more detail. 

This article was written by Derek Boer.  Please email Derek with questions or comments at derek.boer@boerinsurance.com.