You all know what I am referring to when I say 'IT'? In French its called merde, my 5 year old son calls it 'number 2'. Pardon my French but 'IT' will be what you say when disaster strikes.
I am talking about floods, kitchen fires, wild fires, tornadoes, hurricanes, giant snow storms, huge hail and yes, rocks from outer space destroying your home. 'IT' happens and more often than most of us recognize.
My family has learned, first hand, that it is urgently important to protect yourself from the worst and live for the best. I'm not talking about running around with your rear view mirror glued to your head in panic but I am referring to not being cheap about INSURANCE.
Let me take you back a few years....
Its October 2007 in San Diego. I am out with my two boys and one of their friends riding ATV's in the country side with nary-a-care in the world. Our lives were perfect, our spirits high, our fun factor at a maximum. Little did we know that everything we considered fun, safe and private would be changed forever.
Toward the end of our ride we took a break for a snack and a soda. We looked east over the vast San Pasqual Valley in San Diego County out over the sod farms, dairy farms and orange groves. What we saw immediately caused concern. There it was, like so many times before this one, a puff of smoke off in the distance several miles away up to the north and east of us. We headed home but with only a little more haste than usual. On our way home we had noticed that the infamous Santa Ana winds (a dry seasonal wind that blows from over the southwestern deserts toward the coast often with 50MPH and higher gusts) were picking up velocity but we did not fret because this did not seem any different from several other similar episodes, distant smoke included. We were concerned but we had been there before, so we thought.
Upon heading home, I did the usual family preparedness: calling my children home, sitting with my wife and reviewing our disaster plan, opening a line of communication with the local fire department (San Pasqual Fire Department) and then giving a brief but concise lecture to the children (we have 6 children).
I will keep the gory details to a minimum but imagine running for your life, seeing your pets burn, narrowly escaping a harrowing death amongst 100MPH plus wildfire swept winds while driving at high speeds in zero visibility, the sky black and literally falling with debris of your burnt belongs landing in clumps of fire on your escape vehicles and what few personal belongings you have managed to pack catching fire in the back of your trucks while trying to escape. At one point my truck even stalled because a tornado of fire crossed over the street, leaped to the hood of my truck and sucked the oxygen right out of the engine causing it to gasp, choke and fail.
Fast forward 4 hours...
The sky was black with soot, ash and debris. Visibility was low and the air hard to breath. My wife and I (children at a friends home now) crested our little knoll where our barn was once before. We kept looking up, anticipating that the gorgeous home we worked our entire lives for had survived. The smoke cleared for a split second to reveal total destruction.
This is a true story about INSURANCE, disaster and why you need to think twice about buying the cheapest policy you can find. After this fire we lost our home and everything on our main property as well as a rental home, office and two businesses on another property a few miles away from our home.
Everything was destroyed, we lost it all. In one fell swoop our lives, careers, client files, data, computers and even our triple redundant data storage was all destroyed. I had clients in escrow waiting for loan approvals that had their files completely wasted. Imagine trying to rebuild a client file while distraught, with no equipment, computers or even paper to copy their information! The local Kinkos staff and I became great friends.
Insurance...
This is what this whole story has led up to. Please think of this as lessons learned and please educate your clients from now on about insurance.
To put it simply, we did not have enough insurance. We had paid our insurance, without fail, for years but when it came to the time when we wanted what we had paid for the game suddenly changed. We had purchased cut rate and off brand insurance. We even purchased two policies, although on accident (we shopped and purchased a new policy to replace our old and the old had not yet lapsed). None of this helped with our rebuild whilst trying to piece our lives back together.
Let it be known that you MUST review your policy very very closely. Here are some items to consider:
Is there enough insurance to actually rebuild your home? Check with local contractors and ask, on average, what it would cost to rebuild your style home realistically.
How much money is there in additional living expenses (AKA "ALE")? This is extremely important. You need a sense of normalcy after a disaster. You need to make sure you have enough money to rent a like kind home while you rebuild your home.
How is ALE paid out? Is it a lump some of your entire coverage? Will they only pay if you incur the expense? You definitely want and NEED the cash, trust me. It is painfully difficult to have to front money to your landlord and wait 30 days for reimbursement from your insurance company. Especially hard if your bank records, drivers license, photo ID's and social security cards as well as credit cards have all been destroyed.
Are your collectible items covered? Stamps, antiques etc may NOT be covered or may be capped!
Are your recreation vehicles covered? Boats, ATV's, trailers etc may not be covered by your homeowners policy.
What if you do not want to rebuild or it is just impossible to rebuild due to topographical changes or fire dept regulations? Can you get a cash settlement for what you paid for? You better check this out. We would have been way better off if the insurance company just wrote one check for what we were owed and sent us on our way.
The most important and valuable lesson here is that you need to work with a well known, highly rated insurance company. Most of my neighbors that had 'name brand' insurance had a much easier experience. Some insurance companies even showed up at the burned properties within days (some cases hours) of the fire with checks in hand doing everything they could to ease the chaos, pain and suffering that ensues directly after losing everything you have.
Buy insurance, buy as much as they are willing to sell you. Shop around and do not look for the cheapest insurance quote. Read between the lines, review your policy and ask the questions above. It could be the smartest and wisest investment you have ever made.
For those wondering how the story turns out, please review the link and video below. We are survivors!
http://www.cbs8.com/Global/story.asp?S=11369636
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