What the California wildfires can teach you about protecting your possessions.
By Kimberly Lankford, Contributing Editor
From Kiplinger's Personal Finance magazine, February 2008
As wildfires raged near his Los Angeles home, CPA Michael Eisenberg finally created a family contact list. "We updated phone and fax numbers and e-mail addresses, and appointed a relative in New York City to be the contact person." That way, says Eisenberg, there'd be someone who could relay information to the rest of the family.
Derek Ross, an insurance agent in Woodland Hills, Cal., took photos and updated an inventory of items in his home. Then he took the precaution of e-mailing a copy of the inventory to a sister in Florida. He says handing a photo disc to an adjuster is easier than having to remember everything you've lost -- and your claim will be processed faster.
Having experienced the wildfires of 2003 and 2007 -- and counseled clients who were evacuated or lost their homes -- Eisenberg and Ross are doubly qualified to give advice on how to prepare for a disaster. They recommend that you also take the following steps:
Make sure you have enough homeowners insurance.
In 2003, many Californians discovered that they didn't have sufficient coverage to rebuild their homes.
If you've made major home improvements, let your insurer know right away. Most insurers limit coverage to 125% to 150% of the insured amount, which might not be enough to cover the rising cost of building materials. AccuCoverage.com lets you access the same replacement-cost estimates that insurers use (the service costs $7.95).
Build an emergency fund.
Eisenberg used to recommend keeping three to six months of living expenses in reserve. Now, he says, "if you have enough money to tide you over for six months to a year, you can make better decisions."
If you're evacuated, call your insurance agent immediately. Last fall, some insurers made arrangements for California policyholders to stay in local hotels.
Keep receipts for your lodging, food and other living expenses...
while you're away from home. Your insurer will reimburse you. And if worst comes to worst, "put in your claim, get the ball rolling, and get the adjuster's name and contact information," says Ross.
Let your employer and lenders know where you are.
Eisenberg says that some employees received advances, and some lenders extended deadlines or set up flexible payment programs for people in disaster areas.
Take advantage of tax breaks.
You can deduct casualty losses on your income-tax return that aren't reimbursed by insurance. To qualify, you must subtract $100 plus 10% of your adjusted gross income from the unreimbursed loss (go to www.irs.gov for details).
http://www.ready.gov/
http://www.redcross.org/services/disaster/0,1082,0_500_,00.html
http://www.fema.gov/areyouready/
http://www.sba.gov/npm2006/
http://www.wunderground.com/
Burned Out in the California Hills...
Paul Kassel was among the hundreds who lost their homes last fall in the firestorms north of San Diego.
As told to Walter G. Meyer
From Kiplinger's Personal Finance magazine, February 2008
How did you get the word to evacuate? At three thirty in the morning, I got a call from my brother Dan, who lives about five miles away. He said, "The flames are right there. You'd better get out." We took 15 minutes to gather up a few things, thinking we'd be right back.
You were prepared? We were the poster children for the fire department on how to clear the brush around your house. I came back expecting that our house would still be there because we had worked so hard on clearing. But the fire came down a hill and started creating its own wind tunnel. A firestorm has the sense of an atom bomb. It knocked a giant tree over.
So the house burned? When I called the house and got a busy signal, I knew that was a bad sign. Then at about two in the afternoon, I went back with my son. There was a dead deer right in front of our gate. We just started crying.
Another brother lost his house in a previous fire? Dave's house was destroyed four years ago in the Cedar Fire that wiped out 1,500 houses in the San Diego area. Because of Dave's experience and advice -- we called it nagging -- to make sure that we were protected in every way and ready to evacuate, we were better prepared than most.
You had plenty of insurance? On Dave's advice I shopped around and ended up with Chubb Personal Insurance. With the numbers Dave told me to make sure I had -- I paid $3,200 a year in premiums -- the company hasn't even suggested that it will not fulfill my policy. Chubb's adjuster said, "Mr. Kassel, I'm sorry to tell you this, but your house is a total loss." And I said, "No kidding."
How long will it take to rebuild? About two years. With design, demolition and site work, I figure they won't start for six months.
How much was the house worth? Approximately $3-million-plus. It was built in 1999 for former baseball player Howard Johnson. We have not yet determined the value of the contents -- maybe $800,000 to $900,000. I lost my whole baseball collection. I know it's just a baseball collection, but I can't get back Mickey Mantle's last jersey.
Really? Mickey Mantle's last jersey? Signed and framed.
