Many homeowners devastated by wildfires face a harsh reality: their insurance coverage is insufficient to rebuild. The Marshall Fire in Colorado, which destroyed over 1,000 homes in December 2021, exposed this issue. Researchers found that 74% of affected homeowners were underinsured, with 36% severely underinsured, leaving many unable to rebuild. The financial gap—often $100,000 to $250,000 or more—led to increased property sales rather than reconstruction.
Experts term this phenomenon “coverage neglect,” where homeowners prioritize premium costs over coverage limits. Nationally, about three in four homeowners' policies are underinsured, and one in 13 homes lacks coverage entirely.
The issue is particularly severe in high-cost areas like Jackson Hole, Wyoming, where rebuilding costs soar to at least $750 per square foot—five times the national average. Insurance expert Kerry Majhanovich attributes this to limited land, high material costs, and an imported labor force. Underwriters unfamiliar with the region often resist issuing policies that reflect true rebuilding costs, leading to conflicts with local insurance agents.
Majhanovich advises homeowners to regularly review their policies with a trusted agent and obtain updated quotes every three to five years. She also suggests consulting local contractors to understand current rebuilding costs. Without proper coverage, homeowners risk severe financial hardship when disaster strikes.
Read more at Jackson Hole News and Guide here: https://www.jhnewsandguide.com/news/business/los-angeles-burns-spotlight-jackson-hole-homeowners-underinsurance-risk/article_f9fc7e00-dd07-11ef-bc6d-0704441bf33e.html?block_id=1846868
