Extra Crispy

| March 3, 2014 | 0 Comments

By now, it can’t come as a surprise to San Diegans that California is facing one of the worst droughts in recorded history, and according to one report, maybe the worst since 1580. In a recent interview on KPBS, CAL FIRE San Diego Deputy Chief Kelly Zombro stated that local brush moisture levels are at levels usually seen later in the year. There have even been brush fires along the coast in Northern California, something that is unheard of in that normally moist region.

The fire risks this year for back-country residents have been well publicized, but what does that mean if you live in the heart of the city? Even central communities like Mission Hills have deep canyons that can quickly funnel brush fires up into unprepared homes, especially during windy Santa Ana conditions.

There are two things you should do now to prepare for a hot, dry summer.

Check your home’s fire safety. According to Rene Roe of IOA Insurance Services, there are several things you can do to better prepare your home for the worst. These include:

• Over half of home fires are caused by electrical problems, so having a qualified electrician inspect your wiring might be a good idea, especially if you have ungrounded or two-prong sockets, or outdated wiring. This is common in older neighborhoods like Mission Hills where homes often have knob and tube wiring intermixed with modern electrical systems.
• Check your fireplace for creosote (a sticky, oily combustible residue deposited in your chimney over the years) buildup and other maintenance hazards like cracks. Also make sure you have a spark arrestor installed at the top of your chimney.
• Outdoor grills should be kept away from structures in your yard, especially deck railings which can be very dry and brittle.
• For homes on or near canyons (or open space), review the San Diego Fire-Rescue Department’s Brush Management Guide (https://www.sandiego.gov/fire/pdf/brushpdf.pdf) to ensure your home has adequate defensible space in the event of a fire near your property.
• Check that you have at least one up-to-date fire extinguisher readily available, and that smoke detectors are functioning properly.
Review your homeowner’s insurance. Beyond preparing your house for fire, if the worst does happen, you need to be sure that any loss you might suffer will be covered.
• Check that your dwelling coverage is up to par. This is not the Zillow sale value of your property; it is the value of the structures on your property. Construction costs for a typical tract home can be $200-300 per square foot or more, and can be much higher depending on things like your appliances, or fine finishes like granite or mahogany paneling, etc.
• If you have significant art, jewelry or electronic equipment, the default coverage levels for your personal property (the contents of your home) may not be enough. You can use riders to add coverage where the policy defaults come up short.
• Many policies will include some provision for replacement of your home, but the details matter a LOT. “Guaranteed Replacement Cost” usually pays the full cost to rebuild a home, while “Actual Cash Value” coverage typically pays less – the fair market value of your home reduced for age and wear. Some policies include limited increases in replacement costs, but these are generally intended to compensate you for increased construction costs when several homes in an area are damaged. Your insurance coverage should reflect the full value of your dwelling, and should be reviewed at least every other year to ensure it is still current.
• Check your liability coverage. This will cover you for damage caused to someone else – for example, damage to your neighbor’s house caused by sparks or a fire on your property. Liability limits for most homeowners’ policies are too low to cover significant damages so an umbrella policy is often needed for additional protection.

If you have any questions about your homeowner’s policy or about the fire safety of your home, your property insurance agent is the first place to start. Review your policy with your agent and ask if they have resources for more thorough fire preparedness reviews if necessary.

This column is prepared by Rick Brooks, CFA, CFP®. Rick is Vice President for Investment Management with Blankinship & Foster, LLC, a wealth advisory firm specializing in comprehensive financial planning and investment management. Rick can be reached at (858) 755-5166, or by email at brooks@bfadvisors.com. Rick and his family live in Mission Hills.

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