Home Insurance 101 – Part 1, by C.J.

Without question, our homestead, retreat, compound, farm, ranch or home is one of our most valuable assets in a TEOTWAWKI scenario. It will be where we hunker down, retreat to and use to protect ourselves from what dangers threaten us. Properly insuring your home and all your survival gear is of great importance. Having insurance to replace what was lost and not having to start over can make all the difference in the world. While insurance certainly isn’t as exciting of a topic as gun reviews, gardening techniques or pretty much everything else we read about on SurvivalBlog, it is as important, and worth having a good working knowledge of what you may need.

We all prepare for the end of the world as we know it, but understanding insurance will help you for “the end of the world as you know it” events we’re all at risk for. Below are my suggestions on what you can do to review your policy as well as understand what coverages you have and might need. I did my best to keep the topics relevant to SurvivalBlog readers and what I anticipate your concerns may be. Please note this is for entertainment purposes only, and you should consult with your specific agent as coverages and laws vary from state to state. Also, please note this is not a complete list of coverages you may need. I simply highlighted some areas I thought might be of particular interest to SurvivalBlog readers.

Dwelling Coverage

This is the coverage that insures the main home. The coverage amount should reflect the price per square foot to build in your area. This can vary greatly based on location, so be sure you understand your local cost to build, and make sure you have a bit more than you may think you need today. As current events in the world can disrupt supply chains, the cost of materials can increase quickly. Many policies will include extended replacement coverage for such scenarios. Be sure you have at least 25% extended replacement coverage. Ideally, 100% extended replacement coverage or guaranteed replacement coverage would be best.

Other Structures

This will most likely pertain to many SurvivalBlog readers. This is the coverage that insures any structure other than the main home. Sheds, shops, barns, stables, fences, etc. are all covered under this coverage. The standard coverage is 10% of the dwelling coverage, which for many people will not be enough. Be sure you adjust this coverage for your specific need.

Personal Property

This is the coverage that covers all your stuff. No doubt, there is going to be a bit of controversy and varying opinions in regards to how to handle this for survival minded folks. All policies will have special sub-limits for categories like jewelry, art, firearms, and collectibles. Many policies will have sub-limits for other categories as well.   There are two primary ways to increase the coverage for sub-limited categories. I am going to speak specifically for firearms, as I feel that is what will pertain most to SurvivalBlog readers, but this advice typically will apply to all categories that have a sub-limit. The first way is by increasing the blanket limit. Most policies will have a $1,000 to $2,500 limit for firearms. Many carriers will let you increase this blanket limit to a higher limit. Most carriers will have an overall limit they will let you increase this to. For many of you, this probably won’t be nearly enough coverage regardless. The main benefit of the blanket option is they don’t require a list of firearms and it’s pretty simple to just increase the limit. One drawback to this option is “Loss” is not typically a covered peril. You are strictly covered for the named perils of your policy (Fire, theft, etc.) I fully expect readers to not lose their firearms but it can be much more prevalent with jewelry, so it’s worth mentioning.

The 2nd option is to schedule your firearms on your homeowner’s policy. The advantage to this option is that the limit can be much higher. The absolute disadvantage is they will require a list of your firearms. I suspect the majority of SurvivalBlog readers will not go for that, and understandable so for obvious OPSEC reasons. This option typically does cover loss as a covered peril (see above). With all of this in mind, I typically advise my clients to insure firearms outside of their homeowner’s policy. The coverage limitations from option A and the OPSEC concerns of option B make the homeowners policy a poor choice for insuring firearms. There are many supplement firearms policies out there that have high coverage limits with no intrusive requirements. Buyer beware on these policies. The quality and fine print will vary greatly, and I strongly recommend you go through a reputable carrier. Usually, firearm retailers can recommend carriers they use and have a good history with. Also, many firearm organizations have recommendations as well. A quick note on firearm safes. Many safes are fire-resistant, but not fireproof. Be mindful of what you have, and how these plays into your risk and strategy for protecting your firearms. The quantity, quality and overall value of your collection should in part dictate how you insure them.

Many policies do not have a limit for tools. An exception to this is if the tools are used for business purposes. Some policies do have a tool limit, so be sure to verify what you specifically have for tools. If you do own a business, it is best to cover the tools used for that business on a commercial business policy as most homeowners’ policies will not cover business tools.

With all personal property, it’s a good idea to have an inventory of what you have. Partly, this will help you prove to an adjuster what you owned, but it will also help you remember what you own. Undoubtedly, leaving this to memory will have you shortchanging yourself after a total loss. Again, there will be varying opinions on this, but to what extent you want to document your belongings is up to you. Many of my clients will walk through their home and video every room as a way to document what they have and keep the video to recall after a total loss. OPSEC in this regard is very important, but being able to recall everything you owned is important as well. Use your best judgment on how to best handle this for your situation.

One point to note, if you own anything unique or very high end that most people wouldn’t own, it is a good idea to have proof of ownership. Most claims adjusters won’t question a $700 mountain bike, but they are probably going to want some sort of proof if you claim you had a $10,000 mountain bike. Credit card receipts or simple pictures can go a long way with these items.

Liability Coverage

This is the coverage that protects you from a lawsuit. Someone slips and falls on ice on your property, the dog bites the neighbor kid, your kids damage the neighbor’s property. These are just a few examples of liability issues you may find yourself negligent for. A simple rule of thumb, the more liability coverage the better. You can’t calculate risk when it comes to liability. Whereas you can get a pretty good idea of how much property coverage you may need, you cannot control the amount someone sues you for. Most policies offer $500,000 in liability. Some even go up to $1,000,000. This coverage is inexpensive and I would recommend getting as much as they offer. If you have the need for even more liability coverage, talk to your agent about adding an umbrella policy. An umbrella is simply additional liability coverage that will float over all your underlying policies (auto, home, boat, ATV, etc.). Just be sure all those risks are listed on the umbrella so the umbrella will extend to those policies.

Insurance Trends

Many of us live in areas prone to hail. I strongly recommend you verify your policy has full replacement for the roof. Many policies have moved to Actual Cash Value (depreciation) for roof replacement which payout based on the age of the roof. Also, please be mindful of separate wind and hail deductibles. Your policy can change with every renewal, and many times people will not realize they have a new higher wind and hail deductible. You also want to verify you have ordinance and law (building code) coverage. Building codes can vary greatly from county to county, but understand your policy will pay for what you had pre-loss. If the county building code requires you to have something you did not have before (flashing on roof, aluminum to copper wiring) you will need ordinance and law coverage to cover this.

(To be concluded tomorrow, in Part 2.)




22 Comments

  1. People really need to interrogate their insurance agent to identify what is covered under each type of policy and make notes. Some things will depend on what state you live in. As mentioned by the author, deductibles have gone sky high now. Additional riders may be needed for “vandalism” or wood stoves. Ask about septic system coverage; some have riders others don’t cover it at all. Oh, and every year the insurance company can and may change what is covered/not covered, and of course increase your premiums.

    Looking forward to next part.

  2. I had a relative that, decades ago, had a high value vehicle stolen from his driveway. It turned out that the thieves somehow obtained a list from his insurance company of these type vehicles.

    In the future, will the government use these lists, pertaining to firearms, for confiscations/imprisonments?

    1. Insurance company lists were how FDR was able to locate all of the people in the United States who had gold, and who had insured it. He then confiscated all of it, and made ownership of gold illegal for Americans.

      The answer is, yes.

  3. Having been through a house fire I totally agree on having insurance. You never think it will happen to you, but it can. Also, Get Fire Extinguishers!!! It wouldn’t have helped us as we weren’t home but it could save a lot of damage. Plus as time goes on the firefighter associations may not be as available.

    1. +1 on insurance. We are going through the tail end of a house fire. Our insurance agent and all associated people couldn’t have been more helpful. Although the damage was relatively minor, it did make the house uninhabitable. Thankfully no one was hurt, and it’s almost over.
      We did obtain insurance for the rental they put us in as well.

  4. I recommend that folks invest in high protection shelters, instead of conventional wooden shelters. Something that can withstand a hurricane, wildfire, or gunfire, constructed using techniques like earthbag, ICF, thin shell concrete domes, underground water cisterns, earth ship, aircrete, gabion, etc…

    I’ve seen too many folks buy that portable shed… It is cheap, fast, gets you onto your property, keeps things out of the weather, but not very safe for valuables and necessities in the long run.

  5. People really……insurance is a feel good situation………for current ideal situations yes do it, however, we are now seeing the future shock Alvin Toffler mentioned in the book of that name. As we descend to whatever is coming, things like insurance, and retirement, social security, will be a bankrupt dream. Am I being negative, some will think that, I am instead being a realist, what you have in your “larder” will be what you can use, not an account, not a bank vault, and not with federal government. My parents were a product of the 10 year depression, of the 30s they lost everything through banks, and friends, and economic situation. My father bought ten acres and built a nice 2000 sq ft Brick home, all for 3500 dollars…..they never had insurance, never trusted banks, no credit cards and did not survive, they thrived. Everyone has a choice, mine is to build my own insurance in the form of tangibly that resides with me. No longer have nor want a 500 k home with all the expenses and slave existence it put me in servitude to. Now have a 1200’ double wide on some average, no bills, very little expense and in Nevada 400 dollars a year in property taxes, yes four hundred dollars. I spread my tangibles around …and prepare to be that that lean mean machine, god based, and liberty bound….no exceptions. My advice for what’s its worth, get out of the madhouse cities and more so, madhouse states, put down roots where they have a decent chance of surviving…use the Jewish principals of be aware, be forewarned, be proactive, don’t wait for the current day nazis to pen you in a Warsaw city, put the brain in real time and get your head out of your tailbone. God bless our country, we are going to need it.

      1. James thanks for the comment……insurance for people who have a lot to lose, is great, for people like myself with few assets, and no income stream is a luxury. Also living in a remote rural area as I do, we have been “redlined” by insurance companies who want as an example 2000 a year for basic nothing coverage. So that was the basis for my posted comment.

  6. I agree, get the best policy you can afford. I did. When my tree guy accidentally cut several large trees that were on my neighbor’s property (the area is steep mountain slopes, and the boundary line was very irregular), and my neighbor sued me for $40,000 per tree, my gold plated policy paid for the attorneys, and paid the eventual damages. He would have financially ruined me without the policy.

    It may be that in the future, insurance will be unavailable. That is no reason not to take advantage of it now.

    1. Nice guy that neighbor! I’ve never seen a tree worth $40K. Even the finest, straightest
      white and red oak trees bring about $600 each around here.

      In addition, regarding insurance: I found my homeowner’s policy allowed for $500 per firearm. So you need a rider, documented with photos, make, model. serial # , etc for
      the actual value to be reimbursed.

  7. Today is Veterans Day. I don’t celebrate my three years in the Corps. At the same time, I do not regret them. Complicated.

    And I do take my oath of enlistment seriously. Joined Oathkeepers ten years ago.

    Just read an article from a fellow Marine. I quote a bit from Vincent Emanuele.

    I served with the United States Marine Corps, 1st Battalion, 7th Marines, Alpha Company, 3rd Platoon, 1st Squad, 3rd Fire Team, as a Squad Automatic Machine Gunner from September 2002, until January 2006. During that time, I was twice deployed. First, in 2003, in southern Iraq, during the initial invasion and occupation of Iraq. Then, again in 2004–2005, in Al Qaim located in Al Anbar Province, during the height of the insurgency in Iraq.

    In 2008 I testified to U.S. Congress about war crimes the U.S. military was committing in Iraq in the name of democracy and freedom: the wanton killing of non-combatants, the torture of prisoners, the mutilation of dead bodies, the cover-ups, lies, and complete disregard for Iraqi life.

    For those of you reading this who’ve already done your time, hell, even for those of you who remain in the military, remember this: we signed our name on a dotted line, willing to give our lives, not for a specific president or political party, but in the defense of the U.S. Constitution. If you no longer believe in that oath, I understand. However, if you do believe in the oath, understand what it means: “protecting the U.S. Constitution against all enemies, foreign and domestic.”

    No Iraq, Somali, Pakistani, Palestinian, Libyan, or Syrian poses a threat to our constitution. The Republican Party represents a threat to our constitution. The Democratic Party represents a threat to our constitution. Wall Street poses a threat to our constitution. These are the domestic enemies our oath was referring to. Focus your anger and energies on them, not ordinary citizens, our brothers and sisters, or supposed “foreign threats.”

    I stand with Vincent.

    Carry on

  8. I’m wondering about having every outbuilding covered, If there is a fire, usually one outbuilding is destroyed, not every one, unless you live in a fire prone area. I live in farmland so I covered my most expensive outbuilding. That amount should be able to cover a single loss on any of my other buildings.

  9. Great article! In the process of building my permanent BOL, I have been storing pretty much everything in PODS. I checked with my regular insurance agent and he said that they could not insure the items in the PODS, and I would have to go with the overpriced policy that PODS offers. I did that, along with making sure everything was well padded and secured. Just before a recent visit, I received a call from the local PODS location that they needed to talk to me when I got there later that day. When I arrived, to my surprise, they proceeded to tell me that the POD with the 1500# safe in it had been dropped on it’s side (huh?). The safe (secured with blankets and a ten ton strap) had ripped the anchors out of the side wall, and fell across the POD and crushed two five foot tall tool boxes, along with other items. I filed the claim with their joke of an insurance company. The total damages were over $7300. I should note that the safe was four years old and was in perfect condition. They settled for $3400 less than what was damaged. The policy did clearly state that it only covered depreciated value, not replacement. So now I’m left with a bulging, dented, scratched up safe that will cost $500 more out of pocket to replace, never mind the other damaged items. The moral here is, as the author says-in effect- “Let the buyer beware”…and know your policy!
    They say there is no appeal option to their offer of settlement. Does anybody here know if I can file for arbitration on this?

  10. I was once an insurance agent. Could not sleep when a storm came during the night. Not because I was worried about my house but because I knew the phone calls would be coming in the next day. I got out of the insurance business and got a better job. Enough said. I was the type of agent that would fight for my clients and get them the best settlements possible. I coached my clients to understand their coverage. I also had generators stored along with tarps, nails and 2x4s. Why? Because I practiced the golden rule…treat others the way you want to be treated. I would help them cover their roof, after shingles were ripped off due to wind, to avoid additional damage. If their power was out, I would show up with a generator and 2 dozen extension cords. Look for an agent that cares about you. Most agents only care about themselves and the money in their wallets. My wife fussed because I had a client out at night that had a flat tire. I pulled a nail out of her tire and plugged it. Aired it up with my compressor and she was happy. Look for an agent that will go the extra mile to help you. Some will do it.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.