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Is the View Worth the Risk?

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You’ve had your eye on that cliffside property with the great view of the bay for a while now. You’ve been assured that the land is safe to build on, but as a California resident, you know all too well what can happen. Unfortunately, wildfires later resulting in landslides happen too frequently in California.

According to the U.S. Geological Survey, the estimated total annual losses (direct and indirect) in the United States are about $2 billion per year. So, if you decide to move ahead with your plan to build, you should get some kind of protection for your investment.

Most standard homeowner’s insurance policies don’t cover landslides. Read the fine print — landslides and earthquakes are considered perils and therefore not covered. In California, you have to purchase a separate policy for landslide insurance and few, if any, U.S. insurance companies offer them.

Lloyd’s of London underwrites landslide policies and the only way to get this expensive policy is through an insurance broker. Before you buy a Lloyd’s landslide policy, here are some important facts to consider:

  • You are only reimbursed for the cost of reconstruction if your house is a total loss.
  • If you have to make improvements to the land to stabilize it before you rebuild, you must pay for that.
  • If you must meet mandated new safety requirements, you are not reimbursed for upgrades.
  • The standard deductible is five percent of the home’s value, with a separate $1,000 deductible for living expenses under certain policies.

You could sustain a total loss if your dream home were to slide down the cliff. Do you want to take the risk? Contact a California real estate attorney to discuss your options regarding landslide insurance.  By: Walt Shjeflo


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