Too often people discover after they suffer a loss that they have not purchased enough insurance or the right kind of insurance coverage. It is your responsibility to purchase enough insurance, and the right kinds of insurance coverages to protect you in case of an insurable loss.
The California FAIR Plan does not estimate the cost to rebuild your home or building, its value or the cost of labor and materials in your (or any other) area. Nor does the FAIR Plan determine the appropriateness of the coverage you request.
Those are your responsibilities.
The cost to rebuild your property after a loss is not the same as new construction costs, since debris removal will be involved as well as other costs that are not associated with new construction. In the event of a loss due to catastrophe, costs may increase due to a surge in demand for labor and materials.
The best way for you to know how much insurance may be required to rebuild your property is to work with a local contractor who can estimate the cost to rebuild after a loss. Another alternative, especially for residences, is to access one or more of the home reconstruction cost calculators. Links to two of these calculators appear at the bottom of this page.
When insuring your dwelling, your Coverage A limit of liability should be set high enough to pay for more than loss to the dwelling. This is because the policy permits you to apply up to 10% of your Coverage A limit of liability to cover loss to detached "other structures" caused by a covered peril, and to use up to 10% of the Coverage A limit of liability for loss of fair rental value. Payments of insurance proceeds for these purposes, taken from your Coverage A limit, reduce the amount of money available to pay for loss to your home. In addition, debris removal expense payments for dwelling damage further reduce the Coverage A limit of liability.
You may purchase separate coverage for loss to detached other structures, and for loss of fair rental value, payments under which will not reduce the amount of money available to pay for loss to your dwelling. If you do not, you should consider purchasing a Coverage A limit of liability in an amount sufficient to pay for (1) loss to your dwelling and (2) loss to other structures, rental value loss and debris removal. Please consult with your insurance broker if you have any questions about these coverages, or the amount which may be appropriate for you.
Following are links to websites with online calculators.
DISCLAIMER: While the California FAIR Plan believes you may find value in using one or more of these online calculators, please note that the California FAIR Plan does not endorse or recommend any particular calculator, or control or take responsibility for the accuracy of the information presented by these websites. In using them, you will leave this web site and will be subject to the privacy and other policies of the new sites. You may be charged a fee for using the calculators at these websites.