Are you underinsuring your investment properties? With all the fires going on, we decided to take a closer look at our homeowners insurance policy. We were shocked to find that we were only insured for $247 per square foot, but the actual rebuilding cost for our zip code was closer to $330 per square foot. That’s a huge gap, and if something happened, we wouldn’t have had enough coverage to rebuild.

We immediately called our insurance agency to get it updated. Yes, this raised our premium, but the alternative—being underinsured and unable to rebuild—was much worse.

The Cost to Rebuild Is Higher Than You Think

If you haven’t checked your policy lately, you might be in the same situation. In San Diego, construction costs now range from $300 to $500 per square foot, depending on the area. If your policy is outdated, you could be left covering a massive shortfall out of pocket.

Your insurance rep has access to an updated cost index for your zip code. A quick call to check against your current policy could make all the difference.

Why This Matters

1. Underinsuring Your Investment Properties Could Leave You Stuck – If your coverage doesn’t match real rebuilding costs, you won’t have enough to rebuild.
2. Construction Costs Have Skyrocketed – Material and labor costs keep going up, and older policies may not reflect current prices.
3. A Policy Review Is Quick & Easy – It only took us a phone call to get ours updated. Your insurance agent can check the latest cost index for your area.
4. Better Safe Than Sorry – We never thought we’d have to worry about this, but with fires popping up in Mission Valley and major wildfires hitting LA, it’s a reminder that disasters happen fast.

Take Five Minutes to Protect Yourself

We had no idea we were so underinsured until we checked. If you haven’t looked at your policy in a while, do it now to ensure you too are not underinsuring your investment properties. A quick call to your insurance agent could save you from a devastating financial shortfall in the future.