Prescott Fires Reaffirm Need for Adequate Insurance for Retirement Home

Yarnell Hill Before FireIs your idea of a dream retirement home overlooking a beach or other waterfront property? Do you fantasize about living in the mountains surrounded by a luscious green forest?

When my husband’s best friend retired, he bought a home and land overlooking a bay on the Florida Panhandle close to the Gulf of Mexico. Within two years of moving in, he was hit, not by one, but two hurricanes. While his home was built on stilts and insured, his boy toys were stored underneath the house. During both hurricanes, he lost his dock and many possessions that were not covered by insurance.

As someone who spent twenty-five years in metro Los Angeles, I understand the power of natural disasters. Earthquakes and wildfires are a normal part of living in California. When we moved to Prescott, AZ, we assumed we were safe from many of the effects of Mother Nature. We don’t suffer the severe heat of Phoenix, or the cold and heavy snowfall of Flagstaff. There aren’t hurricanes, tornadoes or earthquakes. We do sit at the foot of a volcano that is hopefully dormant. There is concern of flash flooding during monsoon season and of course, wildfires.

Because we live in an area that suffers from a 10-year drought, wildfires are becoming a normal part of our spring and early summer. Over 100 people lost their homes recently in a fire in the Yarnell, not far from here. Many of these people were retirees who paid cash for their home.

Ask any financial advisor and he or she will say an important retirement strategy is having a home without a mortgage. If your home is not paid off, the holder of the loan will insist on adequate insurance coverage. If you pay off your mortgage or buy a house outright, there isn’t anyone to insist you have insurance. Many of the people who lost their homes in the Yarnell fire were retirees living in their retirement dream home.

Whenever tragedies occur, they provide a wake up call for all of us, whether we were personally affected or not. Our hearts collectively go out to all the people affected by this horrible situation. Promise yourself that first thing next week, you’ll prepare an emergency plan and check your insurance. Tragedies will always occur. The question will be how prepared we are for them.

Photo provided by wikipedia

 

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