Can I buy (more) home insurance when a wildfire threat is imminent?

Some communities in California suffered tremendous loss in recent wildfires. According to United Policyholders, a consumer advocacy group, more than half of the fire victims did not have enough insurance coverage to repair or rebuild their homes. The gap averaged over $100,000. When serving our users with home insurance, we see a similar pattern of under-insurance. In these cases, we always recommend they bring the coverage amount to reflect a more accurate rebuilding cost. Using technology, we also automatically monitor the coverage amount going forward to ensure proper protection.

Interestingly, one of our users asked a question in response to our recommendation. “Why can’t I increase the coverage amount when a wildfire threat is imminent? That way, I don’t have to pay as much now and still get the protection when actually needed.”

Well, if the user indeed tries this, he will be surprised to find that, when a wildfire burns near his home, the insurance companies won’t allow any increase in coverage amount or any reduction in deductibles. They also won’t sell any new homeowner policy. It is called “binding restrictions“. When a binding restriction is in place, there is nothing an insurance agent can do to increase the protection unless a request for change was already initiated. Binding restrictions also occur during other natural disasters such as hurricanes, tornadoes, and flooding.

Upon hearing the explanation, our user happily took our recommendation. At SafeButler, we know that insurance is complicated and boring for most consumers. That’s why we take pride in making sure every user is well protected without them spending mental energy on it. For users that want to dig deeper to better understand our recommendations, we are always happy to explain. After all, we are your advisor and butler when it comes to insurance.