Financial planners take a holistic approach to a client’s finances, and while growing investments is an important goal, protecting the client’s wealth should be another. Generally speaking, the more wealth a client has, the greater the likelihood that they are going to have some significant gaps in their insurance coverage.
- Confirm your home is insured to current rebuilding cost estimates. This can be done by asking your insurance company to come out to view the property or by asking local contractors what the average per square foot cost to rebuild is in the area. We tend to find many clients are underinsured on the dwelling value of their home as no inspection was completed by the insurance carrier they are currently with or the coverage was place at a lower amount to reduce premium.
- Put together a list/inventory of your personal property before a loss occurs. This will help streamline the claims process should you suffer a large loss (like wildfire). You can even simply walk around your home while recording a video on your smartphone to capture the interior features of the home along with the contents. Be sure to email that video to yourself to reference at a later date should you have a claim or upload the video to a cloud service such as Dropbox.
- Insure valuables on a separate policy or place a “rider” on the homeowners policy. If you have large amounts of jewelry, fine art, furs, silverware and other items of high value, your personal property limit under the homeowners may not be enough to cover the value of all items in the event of a total loss.
- Consider an insurance carrier who pays a loss to the home and contents at replacement cost and not actual cash value (depreciated amount).
- Consider an insurance carrier who provides a “cash-out” option in the event of a loss to the home (no requirement to rebuild).
READ MORE: What To Do Before and After a Wildfire
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Mission Wealth is a Registered Investment Adviser. This commentary reflects the personal opinions, viewpoints, and analyses of the Mission Wealth employees providing such comments. It should not be regarded as a description of advisory services provided by Mission Wealth or performance returns of any Mission Wealth client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Mission Wealth manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
