Will Insurance Cover Costs?

A home fire can be a devastating, life-changing event, even if everyone inside gets out unscathed.

In the aftermath of such a fire, the amount of emotional devastation is frequently related to the degree of difficulty involved in rebuilding and replacing the home. The appropriate amount of homeowner insurance can be a primary factor, but it is far from the only one.

Take a mid-century modern home, for example. To some, MCM's, and Eichlers in particular, may seem born of a moment frozen in time, an ideal from another age not adaptable to the 21st century.

This is the dilemma considered in 'Breaking New Ground,' a story by Jack Levitan for the new winter '15 issue of CA-Modern magazine: Are mid-century home construction methods and materials really appropriate and workable in 2015?

The question of what to keep and what to update is considered from the varied viewpoints of participants in replacing three Eichler homes destroyed by catastrophic fires: a homeowner, an architect, a real estate broker, a contractor, and a house flipper.

"We plan to replace it exactly as it was, with the Philippine mahogany," homeowner Carol Heidenreich said early on about her home's rebuilding in San Jose. Her lesson in compromise is an important part of the tale.

Real estate broker Kelly Laule, a player tied to the rebuilding of a fire-ravaged Eichler in Orange, says earthquake safety standards present challenges, noting, "Most houses today require a lot of solid, sheer walls, but with all the glass in an Eichler, that isn't possible."

"We could have gotten by spending a third less. Everything was expensive," says Bryan Ross, the remodeler driving the same project. "These houses don't come close to current standards. I'm making it look exactly the same, yet it will perform like a 2014 property."

Indeed, many of the concessions Heidenreich has ended up making relate to costs and her insurance coverage.

"Because I don't have a lot of money, put it that way, I'm cutting some corners," she acknowledges. Still, Heidenreich says, it would have been worse if she hadn't been well advised by her insurance agent. "He recommended extended coverage. That was a lifesaver."

"Personally, I wouldn't insure an Eichler for less than $230 to $250 per square foot," says Al Chavez, a Farmers Insurance agent in San Jose who has had several Eichler clients. Otherwise, he says, "They may not have sufficient dwelling coverage to rebuild.

"It's not a regular tract-style home," he notes. "Most people don't realize, Building Code Upgrades is a separate coverage...Essentially, Eichler owners need to be a little more conscientious with regard to rebuilding their home."

"I've told people around me to check on their insurance because it may [cost] more than they expect," says Heidenreich, who had mid-$300,000s insurance coverage. "I would say people should be insured for about $500,000 to rebuild."

Some contractors with hands-on experience working on Eichlers on the Peninsula and in the South Bay are not as comfortable with that number. To some, as reported to the Eichler Network, a range from $300 to as much as $350 per square foot is a more realistic comfort zone, when everything is factored in.