FIRE INSURANCE GUIDANCE
What does your FIRE Structure insurance cover? Your insurance covers the loss of the structure of your residence due to destruction or material damage as a direct or indirect consequence of fire. It indemnifies all which is comprised of your walls, floors, foundations, roofs and all the installations affixed to the structure of the building. Any other adjacent or separate structure such as swimming pool, tanks, sports courts, walls, fences or booths; as long as they are located within the boundaries of your lot and declared as part of the dwelling. How is the value of your residence determined? It is determined as a minimum 80% of the real current value of the dwelling, (depreciation and Appreciation included) excluding the value of the lot.
The value of the dwelling according to the appraisal: $80,000 broken down into:
Value of the construction (Structure) $70,000.00
Value of the land $10,000.00
Minimum insured amount $56,000.00 ($70.000 X 80%)
In the Pacific Beach Area, the properties values will continue increasing for the next years, it means you need to make sure to insure your property with a proper value.
Note: Condition of average (also called underinsurance) is the insurance term used when calculating a payout against a claim where the policy undervalues the sum insured. In the event of partial loss, the amount paid against a claim will be in the same proportion as the value of the underinsurance.
The formula used is:
Where Payout is the amount paid out by the policy, Claim is the amount claimed against the policy after a loss, Sum Insured is the maximum amount to be paid out by the policy, and Current Value is the value the policy should be insured for. Underinsurance occurs when Sum Insured is less than Current Value.