A Critical Reminder for Bay Area Homeowners: Don’t Risk Being Underinsured

As we witness the devastation caused by the Palisades fires in Southern California, our hearts go out to all those impacted. These tragic events remind us of the Tubbs fire that ravaged Northern California not so long ago—an experience painfully close to home, with some North Bay friends losing everything.

The risk of loss due to fire is real. Equally real is the danger of being underinsured. During the Tubbs fire, studies revealed that 60% of homeowners didn’t have enough coverage to rebuild.

Why does this happen?

1. Rising construction costs outpace the inflation adjustments most insurance policies include. Between 2013–2017, construction costs increased an average of 5.8% annually—far faster than inflation.

2. After a major disaster, rebuilding costs skyrocket due to labor and material shortages.

3. Many homeowners haven’t updated their policies since buying their home, leaving a significant gap between their coverage and today’s rebuilding costs.

For example, if you purchased your home for $600,000 years ago but it’s now worth $1.7 million, your current coverage may fall dangerously short.

Take Action Today

Protect your investment and your peace of mind by reviewing your homeowner's insurance policy with your insurance agent annually. In preparation for that meeting, obtain an updated home valuation report to insure your coverage aligns more closely with today's values and replacement costs. You should also take a few minutes to photograph or film your home’s contents today—it could make all the difference in an insurance claim.