The Day Our House Nearly Burnt Down
I’m only writing about this now because it’s taken a few months to allow the initial trauma to wear off.
Back in January, Anne wasn’t feeling well. We were using our gas fireplace to stay warm. I went to go pick up the kids from school.
While I was gone, she turned off the gas to the fireplace with the key. When she tightened it, something came loose, and gas started flowing out of the valve. She could hear it and smell it.
As she was attempted to open the doors and find a way to shut the gas off to the house, an ember from the fireplace light the stream of gas on fire.
There was a three-foot blow torch coming out of the hearth in the middle of the living room.
Anne called me back. I’m driving, kids in the car, and listening to a situation where I’m completely helpless. Anne was obviously distraught. She got out of the house but was still yelling at our dog, Murphy, to get out of the house. The kids are hearing all of this.
The kids and I show up at the moments after the fire department arrived. They were able to shut off the gas. Miraculously, there was no damage. Not even a scorch mark on the mantle.
This incident drove home how fortunate we were that nothing caught fire and caused damage to our home. Just imagining if the flames had spread leaves me feeling unsettled - the costs to repair the house and replace all our belongings could have been financially devastating.
It was a wake-up call about the importance of having proper homeowners’ insurance coverage. If a fire did cause that level of destruction, we could have faced overwhelming expenses that quickly could have depleted our savings. And if someone had been injured, we also could have been liable for medical costs and legal consequences.
Insurance is one of those unglamorous personal finance topics that's easy to overlook until you have a close call like we did. But having sufficient coverage is crucial as a safety net against disasters that could otherwise threaten your financial security.
Since then, I've made a point to carefully review our homeowners policy and ensure we have adequate protection for our home, possessions, and any potential liabilities. While it's tempting to try to find ways to save money by reducing coverages, I realize that having adequate coverage if something catastrophic happens is invaluable peace of mind.
Different people look at risk in different ways. There is no one size fits all solution to how home insurance should be designed. But here are some tips when reviewing your current coverage.
Some people are more focused on protecting themselves from a catastrophic event, while others might want to also cover a range of other losses that might be more limited in nature.
It’s important that your coverage match the level of risk you’re comfortable taking. Some homeowners might be comfortable with higher deductibles when they have cash on hand to pay the difference, while others are willing to pay the higher premium to assure, they don’t have to pay more out of pocket.
Reviewing your current dwelling value and personal property coverage is also important. These are the two key policy features that cover you in the event of a catastrophic loss.
For those in North Texas, wind and hail deductibles are important to understand. You typically have a choice of a 1% or 2% of dwelling value deductible. It’s important to know what your policy has and if this is being changed at your renewal.
Once your net worth is high enough, you should also consider an excess liability policy (also known as an umbrella). Your home and auto insurance might not cover the total value of your net worth. Without this added coverage your personal assets could be subject to lawsuits.
If you would like someone to review your coverage, we can arrange you to meet with a qualified property and casualty insurance broker or agent. As a part of our Full-Service Financial Planning offering, we review and provide advice on your existing coverages to help maximize your understanding and confidence and help you balance cost with coverage.
Feel free to set up a call to discuss this further.
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Andrew Eppes, CFP®
Andrew Eppes is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. www.SIPC.org. Nexus Advisors, LLC is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. 14241 Dallas Parkway Suite 1200 Dallas, TX 75254 972-348-6300. The views and opinions expressed are of Andrew Eppes only. They are not necessarily those of MML Investor Services, LLC.CRN6533429052024