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Many people in my area, and in other states, have tragically lost their homes and all of their belongings from fire or tornado. I live near a greenbelt that is more brown these days than green due to a drought. What would happen if I have a total loss? My home is insured for an amount above its resale value - at the estimated cost to rebuild, plus my belongings are insured at a set percentage of the total home value for full replacement value. The agent told me I only needed to appraise jewelry which we don't have enough to worry about.

How much documentation do I need on the belongings in particular? Do I have to have receipts for all of the furniture, electronics, appliances, clothing, tools, etc? Has anyone lost a house completely? If so, what did you experience from your insurance company? What company and what state?

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Most home owners policies want to replace the House almost EXACTLY as it was, it's not like they will just give you the max value of the policy and let you walk away selling just the bare land, also you can't really design a 'different' house to be built even if it would cost the same.So if the old house had 7 rooms so will the new one, same with bathrooms etc.

lonestarguy said:    My home is insured for an amount above its resale value - at the estimated cost to rebuild,This means your resale value is lower than the replacement cost of the improvement? Is this accurate? Anyways, typically a policy without guaranteed replacement cost will pay the actual rebuilding cost up to the insured value; with the guaranteed replacement clause it will pay the actual replacement cost.

nycll said:   lonestarguy said:    My home is insured for an amount above its resale value - at the estimated cost to rebuild,This means your resale value is lower than the replacement cost of the improvement? Is this accurate? Anyways, typically a policy without guaranteed replacement cost will pay the actual rebuilding cost up to the insured value; with the guaranteed replacement clause it will pay the actual replacement cost.

I was told that in my area -- mostly an area with newer homes, that because the land is only worth about 10-15% of the value of the property, that the rebuiding costs can be more than the resale as they would have to clean up what remained of the old house, plus I would need to get plans made up by an architect (as the old builder is no longer in business) plus I would not be building with economies of scale but contracting out to have one house rebuilt. My neighborhood and most in the area were built with dozens or even hundreds of houses at the same time. I was reading in the local paper that many insurance companies were writing checks for the insured value of the structure -- in just one fire, a town near me lost 1500 homes from one single fire.

Let me quote from this article (http://www.cbsnews.com/stories/2011/09/13/ap/business/main201057...

The Bastrop fire alone has destroyed more than 1,550 homes and charred about 45 square miles. The tally of burned homes ranks the Bastrop blaze as one of the nation's most destructive wildfires, many of which have burned in California over the last 20 years. Among them was a series of nearly two dozen fires in Southern California in 2007 that destroyed more than 3,100 homes.

Although many homeowners have policies that provide for additional living expenses, including hotel and food bills, their lives are in limbo until they can rebuild.

Insurance officials say it's hard to estimate how long that will take, but they believe the claims process should be less complicated than it is for hurricanes. Destruction from a wildfire is usually covered by a standard homeowner's policy. With hurricanes, insurance adjustors sift through the damage to determine whether it was caused by wind or flooding a key factor in whether a homeowner is compensated.

"That alone cuts through a lot of red tape and makes it possible to avoid skirmishes and headaches in settling these claims," Hanna said.

Joe McCormick, a spokesman for Allstate, said company representatives began accepting claims last week based on damage assessments posted online by Bastrop County, but the process ultimately can't be completed until property can be evaluated in person. The recovery process has also been complicated because so many homes appear to be total losses, making it unlikely that residents have inventories of their valuables, McCormick said.

"That can create some complexity," he said. "But it's a fairly common situation, and our adjustors are used to working with customers in that situation."

David Rydell, Allstate's field claims manager, said the Bastrop fire was so hot and fast-moving that many people's homes were destroyed completely, not just partially charred.

"A lot of people have homes that burned down to a slab and vehicles that melted to the tires," Rydell said. "With a lot of fires, you'd see at least some walls or some part of the structures standing, but that's not what happened here."

Because the fire happened over the Labor Day weekend, many customers were out of town and therefore lost dogs, cats, horses and vehicles they otherwise might have been able to save, Rydell said. He said there's no consensus about whether clients intend to stay and rebuild on the same land or move away.

YMMV by state. Nebraska has a law that says the insurance company wrote a policy for $xxx,xxx.yy. When a total loss is proved or agreed to, the check is for the policy max regardless of market valuations. All the agents that I have talked to acknowledge, there is a cost to remove old to build new.
Now proving the value of your goods may be another matter. The more photo and/or detailed receipts (specific items listed) you can come up with, the better. Again, the total loss clause makes a total payout required in Nebraska. Other states YMMV.

OP, make sure that you have an up to date home inventory. You should have this anyway, but particularly since there is apparently a very real current risk to your property. You may want to check out this thread for what others have done. Obviously, off site storage is important. Having adequate documentation should make any claim faster/cleaner, as mentioned in your CBS News quote.

lonestarguy,

I would urge you to check out this collaborative investigation by Bloomberg/PBS:

Home Insurance 9-1-1

Watch the video or read the transcript, and read the Bloomberg story.

With respect to the personal property/contents of home, would an insurer require you to purchase replacements first and only then reimburse you? It seems that if I've insured my personal property for $200k and there is a fire that destroys absolutely everything, the insurer should have to cut me a check for $200k without me proving what's been destroyed. Because if the insurance company isn't paying the policy limits in that circumstance, I would have been paying for illusory insurance coverage, ie paying for excess coverage that the insurance company was never going to have to pay me. Very interested in anyone's experiences or knowledge on the matter.

Insurance typically pays "their valuation" of your destroyed property, then if you actually replace it and it ends up costing more than their valuation, you get a supplemental payment

So you are covered for full replacement value but they don't just hand you a check for the personal property policy limit

SUCKISSTAPLES said:   Insurance typically pays "their valuation" of your destroyed property, then if you actually replace it and it ends up costing more than their valuation, you get a supplemental payment

So you are covered for full replacement value but they don't just hand you a check for the personal property policy limit


Yeah because that old tech flatscreen that may have cost 2k, can most likely be bought now for $700, although if you have a complete loss, i'd imagine it would be easy to MAX personal property. Every stitch of clothes replaced, jackets, shirts underwear socks, every CD, every DVD knives forks spoons china etc etc.

bigdaddycincinnati said:   With respect to the personal property/contents of home, would an insurer require you to purchase replacements first and only then reimburse you? It seems that if I've insured my personal property for $200k and there is a fire that destroys absolutely everything, the insurer should have to cut me a check for $200k without me proving what's been destroyed. Because if the insurance company isn't paying the policy limits in that circumstance, I would have been paying for illusory insurance coverage, ie paying for excess coverage that the insurance company was never going to have to pay me. Very interested in anyone's experiences or knowledge on the matter.

Well your not supposed to 'upgrade' everything should be the SAME, but it's pretty hard to prove in a total loss situation. I'd imagine if you bought a leather Jacket that would say cost $500 from Macy's but you bought it from Marshells for $100, you most likely could get the $500 one as a replacement.But you really can't say i don't want to rebuy all those DVD's just give me the money, well actually you 'might' be able but they are going to value them super low.You are not 'paying' to get 200k, your paying to get UP TO 200k, you still have to prove losses, unless you got a bad policy, or JUST bought everything new, Id imagine MOST people would wind up better, with newer better stuff.

Depends on policy language. As I've talked about in a few other threads, we had insurance with company A. Full replacement on everything, but if we had a total loss, we would get a check for the depreciated amount, and when we bought back new, we would get a check for the difference of what we replaced. So, if we had 4 computers, and only bought back 2, we would get a check for 2 depreciated computers and a check for 2 new computers.

We switched to company B (Chubb-- we also looked at Fireman's Fund, Chartis, and a couple of others) for the very reason of not having that headache if something were to happen. We pay around 20-25% more than our old policies for the same coverage, but they offer full cash-out options. In a simplified way, our limits are "agreed-value", if we so choose. If house is insured for 125,000 and is a total loss (from whatever cause), we can either rebuild and they will pay, or we will get a check for 125,000 and do with it what we choose-- rebuild, vacation, etc...

My agent didn't agree with spending more for the same thing, and doesn't see the value but I write the check. In my case, peace of mind is worth a little extra. Not to mention the policies are usually more inclusive with coverage-- was reading today punitive damages are covered.

fueldude said:   Depends on policy language. As I've talked about in a few other threads, we had insurance with company A. Full replacement on everything, but if we had a total loss, we would get a check for the depreciated amount, and when we bought back new, we would get a check for the difference of what we replaced. So, if we had 4 computers, and only bought back 2, we would get a check for 2 depreciated computers and a check for 2 new computers.


Almost correct. What would happen in reality, is you would get a check for the depreciated amount, and any amount you spent on replacement that went over the depreciated total would be reimbursed. so 4 computer replacement cost 1000x4 , depreciated value 400x4. You buy 2x1000. Insurance cuts you a check for an additional 400.

2 more points.

first, All those DVDs you bought on sale. you still get $20 each(Depreciated of course)

Second, that $5k 42 inch Plasma you got, you're only getting 1200(Again depreciated), but you'd get the same 1200 if you had a 15 year old rear projection monstrosity.

At least that's how it worked with my insurer(USAA) when we had a major loss(Rising water from Katrina).

This actually why many people are legally underinsured and do not know it. Under most policies you are required to carry 80-90% co-insurance of what it will cost to re-build. Just because you buy a property for 20K does not mean thats all you have to insure it for in most cases.

bvosstx said:   As a Texas insurance litigation attorney, I'm working with the insurance companies on a daily basis to ensure that my clients' Bastrop fire claims are not denied. If you still have questions about filing your claim, please give us a call at the Voss Law Firm for a free consultation 866-276-6179. We can help you decide how you want to move forward or if you may need legal representation. Also, take a look at our site for help with your Bastrop fire damage claim questions.

Ambulance chasers are making their way to FWF

Right now I owe 271K on my mortgage. I have gotten a few letters from my mortgage holder (Wells Fargo) because I only insured my home for 200K. (contents for another 100K) My argument to them is that in a total loss situation the land is still worth 250K by itself (The empty lot across the street from me sold 3 months ago for 250K, same size as mine). I told them that hypothetically if my house burned down the land wouldn't burn with it would it? They agreed but a few months later they send another letter wanting me to increase the coverage. I paid 312K for the house 2 years ago. Am I correct in my logic? In a total loss situation I could still sell the land and use the settlement from the insurance company to pay off the mortgage and put a down payment on a new house. Is this how it works?

If my house burned down the insurance company would write me a check for 200K (total loss) + 100K for contents
I then sell the land for 250K

I would then have approx 550K and payoff my mortgage of 271K leaving me with 279K.

Is this right???

You need to send a letter from
Your insurer stating you are insured for full replacement cost , otherwise your lender is going to buy forced place insurance and bill you for it

Logic and talking to the customer service reps is not helpful in this situation.



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