Marc Cuniberti commentary: Homeowners insurance video inspections

Home owners in high fire risk areas probably already know they have a good chance of being routed to the California Fair Plan for the fire portion of their homeowners insurance. Having covered Cal Fair in many articles, I won't go into the specifics of what those policies cover, but it's safe to say the fire risk and a few related ones are what Cal Fair insures. The liability part of the homeowners policy, along with a few other risks such as water damage, theft and falling objects, to name a few, are addressed with a companion policy called a Difference in Conditions (DIC) policy, also nicknamed by some a "wrap" policy. Interesting enough, the Cal Fair policies are easy to get and coverage is seldom refused. What is next to impossible to obtain is the DIC policies. Since the DIC doesn't cover fire, why would that policy be hard to get and why are the DIC companies pulling out of California en masse? Without journeying into the weeds too far, just know the DIC covers falling objects while the Cal Fair covers windblown objects. Since a tree, or even the fire itself, could be argued as to what caused what and what preceded what, therein may lie the problem. Additionally, when whole towns are obliterated by a wildfire, the lawsuits fly everywhere. The insurance companies that could write the DIC policies probably don't want to be anywhere near the many lawsuits and claims that follow. When you obtain a Cal Fair policy, you can expect an inspection of your property at some point. You may not even know when or if it occurred. On the DIC policy, if you are lucky enough to get one or keep the one you have, an inspection may also occur. Once again, you may or may not be notified. Recently, a few DIC companies are requesting video/photo inspections by the homeowners themselves. A fairly new method of obtaining the information they need to confirm a policy, the self-inspection video has requirements homeowners should be aware of in advance so one does not video tape him or herself out of coverage. Once notified a self-inspection is required, you will receive detailed instructions by a web link system and questionnaire. Making sure your video will meet with approval, prepping and servicing the areas that will be filmed will not only give you a better chance at keeping your policy and/or keep premiums low, it will likely make your home just a little bit safer for you and the insurer. They will require all sides of the home be filmed or photographed, including the siding and the roof, your furnace and HVAC systems, fireplaces, visible plumbing in and around all applicable areas, the electrical panel with manufacturer label, the water heater, the kitchen, living room and other rooms, the appliances and any outbuildings, structures, pools or other systems or features they deem necessary. Obviously, you want the video to show a well-kept home, free of debris, with well-serviced appliances and good housekeeping. It is suggested you photograph/video graph in daylight and have good lighting indoors. In conclusion, the self-inspection option and the guide they will provide you assists you and the insurer. Doing what is required will also provide a video/photo record of many things in the home, which will help with any claims you may have should an event such as a wildfire occur. This article expresses the opinion of Marc Cuniberti and is not meant as investment advice or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a BA in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com