As wildfires rage throughout the West, it may be just a matter of time before a big one sparks right here in Southern California. And, the recovery will likely be much tougher this year because many Southern Californians are likely underinsured due to the pandemic.
Linda Ferry lives in the canyons and works hard to keep her home safe during fire season.
"I've put blood, sweat and tears into clearing this place so it's always ready for a fire," said Ferry.
Insurance industry experts say keeping your property cleaned up, like Ferry does, is the most important thing you can do to protect your home from wildfire. But you also need to financially protect it, said Nicole Ganley with the American Property Casualty Insurance Association.
"It's really important to be financially responsible," said Ganley. "Your home is your largest asset and you want to protect it."
That means reviewing your homeowners insurance policy, said Ganley. She said many people are likely underinsured.
Why? There's a lumber shortage, thanks to mills that were shut or slowed down during the pandemic. Add to that the demand for lumber created by other natural disasters, and this has caused the price of wood to skyrocket. It's up 400%, Ganley said.
That means rebuilding your home could now cost much more than your insurance will cover, so you'll either have to shell out thousands of dollars in cash or rebuild a smaller house.
"Instead of building back your 4/3, you have to build back a 3/2, and you don't want to do that," said Ganley.
So she suggests you call your insurance agent and ask about Extended Replacement Cost Coverage.
"Extended replacement cost coverage is going to give you 150% of coverage," said Ganley. "It's going to give you more to cover that demand surge."
Ganley also suggests tweaking your insurance policy so it adjusts to inflation and building code updates.
Ganley conceded these policy changes will cost you a little more, but she said it's a small price to pay for peace of mind.
"A five, ten minute phone call can make all the difference between recovering or not being able to rebuild that house you've invested everything in," she said.