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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Daily Real Estate News  |  November 19, 2007  |   Insurance Won't Replace Many Fire-Damaged Homes
As many as 40 percent of the 14,000 homeowners who lost their houses in California’s devastating forest fires last month are discovering they don’t have enough insurance to rebuild, according to the California Department of Insurance.

Although California state officials have tried to raise home owner awareness of coverage limits, several nationwide studies suggest that homeowners tend to ignore risk and don’t understand that insurance polices don’t guarantee replacement costs.

“Most Americans still think that full coverage means full coverage, but insurance companies know otherwise,” says Douglas Heller, executive director of the Foundation for Taxpayer and Consumer Rights, an advocacy organization.

In addition, the cost of rebuilding a house keeps going up. The Census Bureau estimates that residential construction costs in the Western states were 35 percent higher in 2006 than in 2003. Growing international demand for materials like copper, steel and concrete, and high gasoline prices, industry experts said, caused much of that increase.

Source: The New York Times, Solomon Moore (11/13/2007)

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