Some still have not prepared a defensible space around their homes by clearing brush, dead grass and debris to at least the property line or 100 feet minimum, and many still have those old wood shingle roofs when they could have replaced them by now, considering the 2003 and 2007 fire seasons and the warnings from fire officials for many years before and since that homes with those type roofs just are not defensible against wildfires.
As for insurance, it's the same old game. How can I get the insurance coverage and make the bank happy, while not actually covering the appreciated or real value of my home. In that way I can save some premium dollars and be really insurance smart. After all, my insurance agent is okay with that and has been all along... You could be right, but who is on the hook for the loss when the embers die down and the smoke clears. YOU! You with the under insured home and who cannot replace it for the values you stated were correct when you took out the coverage. Did you think you could have even committed fraud when you signed those documents indicating everything you stated was true to the best of your knowledge? If that were pursued, my friend, you'd be left with no coverage, and just a scorched piece of concrete slab you used to call home with no insurance money to rebuild anything! Think about that for a moment!
Let's think about depreciation, appreciation and all the things that happen during the good and bad economy that we're seeing right now. You bought that house for $500K and it's value, including improvements like the swimming pool and interior work helped it soar to $900K over six years. Then the market plunged over the past two years and now it's worth $400K, less than you paid for it, much less than you have invested in it, and maybe less than you owe based on the mortgage and home equity lines, etc. If you didn't keep the insurance-to-value up on your home as you made improvements, you would likely be woefully under insured should a loss occur.
Since the house has depreciated, some people think that it will cost less to rebuild. Not so. The cost of building materials, fixtures and labor will be significantly higher than they were when your home was built, so even though the value placed on the home as a "real estate sales price" might have tumbled, the actual cost of rebuilding will be lots higher than it was for the original dwelling. Another factor lots of people fail to recognize is the "economy of scale" when a builder completes a development. If you own a tract home, the builder has the benefit of contracting for or purchasing materials at a good savings to build dozens, or even hundreds of homes at one time. That economy is lost when a builder must "spot build" one home. In addition, should the new home have to be rebuilt between existing dwellings that have survived a fire, there are extra costs as restrictions in movement, the cost of cranes or specialized equipment to move equipment and materials over or around adjacent structures to reach back yard areas, have to be included in the costs of rebuilding.
The bottom line is to sit down before the time of loss and pore over your insurance policies and see if you have enough coverage. If you have a replacement value policy, does it cover enough of the replacement value to actually make you whole again, or will it leave you partially rebuilt. Increasing your coverage is as easy as sitting down with your agent or broker, or a phone call to your insurance company, and discussing your needs and what is realistic coverage for your home, business and contents. Once the flames come calling at your door, it's too late to wish you had made the call earlier, because by then, it's too late.
Which reminds me of one of my favorite sayings:
"After you jump, it's too late to wish you bought the better parachute!"