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Preparing for nature's worst

Kiplinger's Personal Finance

Q: I live near the recent wildfires in California, and fortunately my house was safe. What can I do to protect myself financially if I'm not so lucky next time?

A: Most important, make sure you have enough insurance to be able to rebuild your home; many people who lost houses in wildfires in recent years were underinsured. 

Derek Ross, an independent insurance agent whose Oak Park, Calif., house was within 50 yards of the November wildfires, has helped several clients whose homes were lost or damaged.

He recommends getting an estimate on rebuilding costs from an insurer that has visited your home or from a builder that can tell you the cost per square foot of reconstruction in your area. Let them know about any high-end materials used in the house that will need to be replaced.

Ross also suggests getting extended replacement cost coverage, which adds 25 percent to 50 percent to the coverage amount if the cost of labor and materials rises after a disaster.

Having a video inventory of your household before a disaster strikes -- and photos of damages afterward -- will speed up the claims process. Also find out about other coverage that can help.

Insurers typically cover the cost to replace damaged landscaping, with limits up to $1,000 to $5,000. Some insurers even sent out trucks to spray fire retardant on high-end homes.

And if you must evacuate during a fire, keep receipts for the cost of staying in a hotel or rental, which insurers cover as "additional living expenses," often for up to 12 months.

You might be able to claim the casualty loss deduction for any uninsured losses on your tax return if your home is in a federally declared disaster area.

Q. My health plan is offering telemedicine this year. When and why should I use this service?

A. Telemedicine, which offers basic health care through virtual visits with a doctor by phone or video chat, "is ideal for minor health concerns, such as bronchitis, cold and flu, bladder and urinary tract infections, fever, pinkeye, sinus problems, sore throat, and stomachache," says Rebecca Madsen, chief consumer officer for UnitedHealthcare.

You can save a lot of money by using telemedicine, especially if you're paying the full cost of care before reaching your deductible.

The median cost of a video-based doctor's visit is $50, compared with $80 for an office visit; $125 for a visit to an urgent care facility; and $685 for an emergency-room visit, says Madsen.

Kimberly Lankford is a contributing editor to Kiplinger's Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com

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