The Marshall Fire that raged across Superior and Louisville was a sobering reminder that disaster can strike in an instant. It was also a reminder that the right homeowner’s insurance is critical to our ability to rebound after such loss.

Experts note that approximately two-thirds of homeowners are underinsured. In a market like Colorado’s, where home prices and construction costs continue to escalate, this is an ill-advised risk.

With that in mind, it’s time to ask yourself:

How is your policy structured? Generally, coverage comes in three categories.   “Actual cash value” covers the depreciated value of the property at the time of its loss. “Replacement cost” covers what it would cost to buy the same home new. “Extended replacement cost” covers the latter, even if the cost to rebuild is greater than the home’s estimated value; this can happen when there are sudden increases in material or construction costs, as often occur when many homes in one area are being rebuilt at the same time, as with the Marshall Fire.

Have you updated your policy recently? It’s crucial to periodically review your policy to be sure structural changes, as well as new purchases, are accounted for. For example, have you remodeled a bathroom? Added a patio or deck? Likewise, have you bought expensive items that weren’t previously listed? Be sure your policy covers these changes.

Does your policy include living expenses? If your home is destroyed, you’ll need somewhere to live while it’s being rebuilt. A policy that covers “additional living expenses” will reimburse you for rent, hotel rooms, restaurant meals, etc. while you wait.

What about floods or earthquakes? These aren’t generally covered in routine policies. With climate change increasing the possibility of flooding in areas previously deemed flood-free, supplemental coverage might be advisable.