L.A. fires. . . a good time to check your insurance

 

 

It was less than two years ago in August 2023 when I heard the news about the fire that ravaged Lahaina and some other areas of Maui.  Turning on the news the scene looked like something I’d never seen in my lifetime and almost apocalyptic.  The Maui fire of 2023 destroyed approximately 6,271 acres and as I write this article as of Thursday (January 9) afternoon it is expected that the fires burning in the Los Angeles area are expected to consume from 27,000 to over 40,000 acres of California.

 

Truly, it is a tragedy of major proportions and people of that area are going to need help getting back on their feet.  And I’m guessing that there will be more than a couple of death care establishments and cemeteries that will have had their properties ravaged by the fire also.  In my opinion, it is imperative that NFDA and all colleagues help out in this situation where we can.

 

These fires have also brought a stark reality back to me and the days when I operated our business   —   that is, “Is your funeral home protected via insurance should something like this happen to you?”

 

Virtually every business has property and casualty insurance and, especially in this day of online business, it is very easy to re-new policies in effect from year to year.  While that can be well and good, and pretty simple, ask yourself if doing that is a sound way to know that you are properly insured?

 

Insurance is a simple concept. . .where the risks of many are pooled for the potential loss of one.  However, the actual reality of what your policy covers is not a simple statement.

 

In Minnesota we are fortunate that our MFDA (Minnesota Funeral Directors Association) puts on regional meetings every year in September.  Those meetings give practicing funeral directors and funeral home owners the ability to come together with our state association staff and the University of Minnesota School of Mortuary Science staff as well as representatives from our association’s preferred providers of Preneed insurance and property and casualty insurance.  It’s a great place to learn with a question and answer period with all providers.

 

Just this September a question was asked of the property and casualty insurer.  The question was about how much value to put on your building’s insurance policy.  The answer was interesting, and won’t surprise you as it was said that inflation and values had skyrocketed in the last couple of years and a “fixed property value” might leave one short of rebuilding money in the case of a loss.

 

Tom Anderson
Funeral Director Daily

It was suggested that you really need to know what a “replacement cost” for your facility might be and make sure that your policy was structured in a way that you would have enough insurance value to rebuild.  Simply from cumulative inflation since 2021 America has seen an approximately 22% increase in costs.  So, most simply, a building that you think would be worth $1 million might actually cost at least $1,220,000 if completely destroyed.

 

It sounds simple, but evidently the definition of “replacement cost” in a policy does not always mean what you might think “replacement cost” may mean.

 

I don’t pretend to be an expert on insurance, but that simple fact tells me that a good sit-down discussion with my agent discussing values, potential premiums, and all the available options, including deductible amounts should be an annual occurence.  And make sure that you understand what the nomenclature of the policy actually means. . . . . necessary insurance is too vital to your operation to not understand what you are paying for.

 

In my opinion, there is more than enough to worry about with a potential fire, tornado, hurricane, or water loss without having to worry about whether your insurance, and the nomenclature in the policy will cover the loss.

 

In the meantime, if you haven’t already, now is probably a pretty good time to say a prayer for our colleagues in the affected area of California.  They are probably in the process of figuring out how to get their businesses back up and running at the same time that client families also need their help in taking care of their loved ones.

 

National Funeral Directors Association (NFDA):  Click here to learn how to help our California colleagues

 

Information from the Red Cross on obtaining help or giving to the California Fire relief effort.

 

Related —  Here are a couple of related articles written in the last part of 2024 about the Property and Casualty insurance situation moving forward.  It’s amazing to me how the outlook may have changed so much, because of the current California situation, in the short time since these articles were written:

 

 

More news from the world of Death Care:

 

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