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Insurance doesn't always cover the cost. This is because there is severe demand for builders and building materials after a fire; but also because building codes and regulations have got tighter which pushes up costs. Not everyone includes that in their insurance. https://www.irmi.com/articles/expert-commentary/insurance-fo... > Wildfires are like hurricanes. Thousands of homes must be rebuilt at the same time when there is not enough building materials or contractors to go around. This, of course, leads to skyrocketing price increases in labor and materials, making the replacement cost of a home destroyed by the wildfire 50 percent or greater than what it would've been before the fires. Assuming you have enough structural coverage, you are entitled to receive the cost to rebuild your home at today's materials and labor costs. [...] > It will pay the cost to rebuild what you had up to the insured amount if you insured your home for 100 percent of its estimated replacement cost as computed by your agent. Then, if you have an "extended replacement cost" endorsement, it will pay an additional 25 percent, 50 percent, or more of that insured amount, depending on with which company you are insured.1 Finally, if your home is a little older and building construction laws have tightened (such as making your home more earthquake resistant), thereby dramatically increasing the replacement costs, it will typically pay another 10 percent and possibly up to 100 percent additional for those costs, depending on whether you purchased "supplemental building ordinance" coverage. > For example, if you insured your home for its estimated replacement cost of $500,000, but because of the cost increases following a disaster like a wildfire, the replacement cost is $800,000 for what you had, and an additional $200,000 for added costs from building ordinances, you need $1 million to rebuild. Assume you had purchased the optional extended replacement cost endorsement of 150 percent and an optional ordinance endorsement for 125 percent, you could collect up to an additional $375,000 for a grand total of $875,000. Still short of what you needed, but considerably better than the $500,000 original coverage. |