Sierra Vista Herald
Sunday 07/24/2011

To the Editor:

Arizona’s recent wildfires and monsoon flooding offer insurance lessons for home and business owners throughout the state and the Arizona Department of Insurance and the Arizona Insurance Council offer some helpful advice.

One of the most urgent lessons is that wildfires drastically change the landscape around buildings, greatly increasing the risk for flooding and mudslides. Insurance policies generally do not cover this type of damage.

Residents in Flagstaff learned this difficult lesson last year after the Schultz fire when more than 38 homes flooded. In the summer of 2006, the monsoon caused flooding in more than 93 communities throughout the state.

Some homes were hit with a 20-foot surge of water and the flood recovery bill was more than $4.2 million!

Flood insurance carries a 30 day waiting period and must be purchased separately. For more information about flood insurance, contact your insurance agent or the National Flood Insurance Program (NFIP), www.floodsmart.gov.

Wildfire disaster preparedness, making sure that your insurance is prepared to protect you, is another key lesson. Homeowners need to take appropriate steps to clear the area surrounding their home and take inventory of personal possessions. The National Association of Insurance Commissioners offers a free and easy iPhone home inventory app “myHOME Scr.APP.book.

An annual review of insurance coverage helps prevent unpleasant surprises after a loss. Unfortunately, some property owners under-insure their property and possessions and the economic lesson of inadequate coverage can be painful. Homeowner’s insurance covers the cost to rebuild your structures, not the market value! Despite reduced home values, the cost to rebuild your home in the event of a loss could exceed market value.

Be sure to notify your agent or insurer if you’ve made any structural improvements to your home-remodeling, room additions — or if you have acquired new belongings, such as tools, furniture, appliances.

And finally, make sure your homeowner’s policy covers “additional living expenses” to help pay for lodging and meals if you are evacuated, or must reside outside your home during home repairs.

The main lesson: be proactive about your insurance needs!

The authors are: Christina Urias, Director of the Arizona Department of Insurance (www.azinsurance.gov); Ron Williams, Executive Director of the Arizona Insurance Council (www.azinsurance.org).

The Arizona Department of Insurance (ADOI) is the state regulatory agency for insurance laws, consumer protection and economic development.

The Arizona Insurance Council (AIC) is a non-profit, trade association representing property and casualty insurer members operating in Arizona.