Stephen Ellison

Costs Outpacing Insurance Coverage in Rebuilding Homes Lost in Wildfires

First they lost their homes to a raging wildfire. Now many in the North Bay could be forced to sell their charred land. At issue is insurance coverage.

Many residents in Sonoma and Napa counties are discovering they were underinsured because already high rebuilding costs in the Bay Area have been climbing.

In Santa Rosa’s hard-hit Coffey Park neighborhood homeowners are hearing the cost to rebuild could be $600 to $800 per square foot.

Some residents are simply selling out because the fire was too much for them; they have no desire to return. Others are finding out their insurance coverage is coming up short.

Leo Schwab and his wife Mira want to rebuild their three-bedroom home. They had enough insurance when the fire hit, but since then, the price per square foot has jumped.

"Nobody right now has a definite price on how much it costs per square foot to rebuild," Schwab said.

Insurance broker Jay Zemansky said $800 a square foot is double what it was just a year or two ago, and folks who haven’t upped their insurance in decades may be unable to afford to replace what they lost.

"They’re talking about $800 a square foot, where six weeks ago they were talking $500 a square foot," Zemansky said.

Another broker, Cheryl Fessenden, said: "People get a policy and then they stick it in a drawer, and it renews every year, and nobody’s taken the time to review it."

Schwab has heard such stories from his neighbors.

"A lot of neighbors who lived here for 40 years might not have enough insurance," he said.

The Schwabs bought their home four years ago, and even they aren’t sure their coverage is enough.

"With the prices going up double and triple and who knows how far into heaven, it’s not going to be enough," Schwab said.

The underlying message from the North Bay community to the rest of the Bay Area is to check their fire insurance policy and understand that insurance companies may not realize their clients are underinsured.

"Sometimes when you’re working with a company that’s out of state they don’t have a real good sense of what that would take," Fessenden said.

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