“You don’t know the value of proper financial (legal, tax, insurance etc) planning until it’s too late…”

I can’t tell you how many times I have told this to potential clients. I will be in a meeting with someone who’s interested in hiring me to be their advisor. And we inevitably end up discussing a tragic story about someone they know. And that story typically illustrates the downside of lack of planning – whether it’s for retirement income, a tax bill, a legal mishap or an insurable risk.

The recent hurricane revealed some not so nice statistics. Reuters recently reported that 1/5 homes is not insured enough to rebuild in case of

from Reuters

disaster: Reuters

That means that if a tragedy totally destroyed your house, chances are 20% roughly that you are covered to rebuild. Unfortunately, with the enormous cost increases for basic resources (wood, copper, etc), that number may be higher. Also, true replacement cost on insurance policies has been modified in some instances.

What should you do?

I recommend you get a full insurance/risk review with a competent professional. Rebuilding cost is just one area to make sure of. Others include general liability, damage to property caused by your recklessness (potentially:), health risk etc.

In the case of rebuilding cost, it may be helpful to seek out a solid home building contractor and get an estimate for a full rebuild of your house – one with no shortcuts! That number can give you a starting point to plan your insurance. Give that figure to your insurance professional for reference.