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Wildfire victim learns the hard way that home insurance doesn’t cover everything

This is the fourth in a series of stories about how American homeowners recovered from four types of natural disasters and what they learned from the experience.

Homeowner: Andi O’Conor

City: Sugarloaf, Colorado

Disaster: Wildfire (2010)

Andi O’Conor was on a fall road trip to Washington state with her dog, Nellie, when she found out that a wildfire had broken out near her home in Colorado. “People kept calling,” she says. “I found out the fire was coming very near my house.”

A Chicago native, O’Connor had fallen in love with Colorado and bought a house in the Rocky Mountains outside Boulder. “It sat over an entire, expansive view of the mountains,” O’Conor recalls. “I could see the twinkling of the city lights down below.”

When the Fourmile Canyon Fire threatened her home in September 2010, O’Conor was frantic. “I was desperately trying to find out if my house had burned down,” she says, “or if it was OK.”

A day later, O’Conor’s cellphone rang. One of her neighbors, equipped with a pair of binoculars, had climbed a nearby hill. “Honey, are you sitting down?” the neighbor told O’Conor. The neighbor delivered the bad news: O’Conor’s house had burned to the foundation.

[caption align="alignright" width="397" caption="Andi O’Conor’s Colorado home was destroyed by a wildfire in 2010."]wildfire-damage[/caption]

“I thought, ‘Wow, this is all I own in the entire world: the suitcases in the back seat, the kayak on top of my car, and my dog,” O’Conor says.

To learn how to navigate insurance issues following the wildfire, O’Conor took a class sponsored by her county and put on by United Policyholders.

“People think that your house burns down, it gets hit by a tornado or there’s a flood, and your insurance company shows up magically, like in the TV commercial, and they write you a check,” O’Conor says. “It’s nothing like that.”

O’Conor learned that if you don’t think your insurance adjuster is a good fit, you can ask for a different one. She also learned that building a house takes a long time – so she was glad that her policy provided for two years of “additional living expenses” coverage.

Amy Bach, executive director of United Policyholders, says: “We’re trying to push for that as the standard across the country. It’s so hard to get your house rebuilt and get back on your feet in a year – it hardly ever happens.”

But one hard lesson O’Conor learned is that you can’t count on your agent to make sure you have enough coverage to rebuild. After the fire, O’Conor, who had homeowner’s insurance from State Farm, found she was about $150,000 short, so she had to use some of the money she got for her destroyed contents to scrape together enough cash for a new, smaller, energy-efficient house.

Bach says: “Underinsurance after a total loss is an epidemic throughout the country.”

She recommends finding a reputable agent or broker and having him do the math to figure out what it would cost to rebuild your house in your area, and then get a second opinion. It usually costs at least $160 to $400 per square foot, depending on your geographic area and the style of construction, she says.

Bach also suggests adding an extended replacement cost “endorsement,” or add-on, to cover the cost of rebuilding even if the dollar amount exceeds your policy limits. Also, she says, make sure the endorsement includes coverage that pays the cost of constructing a new home that complies with up-to-date building codes.

When O’Conor built her new home, she made sure it was insured for the right amount – which cost only $200 a year more than her old policy.

“That was less than $20 a month to double my coverage,” she says. “This is the best deal you’re going to make in your life – to protect your most important asset.”

Insurance lessons learned

1.Make sure your home is insured for the correct amount so you have enough money to rebuild.

2.Make sure your policy covers additional living expenses for a two-year period.

3.If disaster hits, consider getting expert help to navigate the claim process.

Andi O’Conor blogs about recovering from the wildfire at

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