Fire - 2 units (complete loss)...how to deal with insurance?

5 Replies

So I had a fire destroy two of my houses. One 3 bed, 2 bath, and an ADU that is 2 bed, 1 bath. I have insurance and the adjuster just came out today (it took some time for the town to do asbestos testing and allow access). The adjuster said it looked like a total loss, but to wait on his report. He doesn't actually work for my insurance company - he is a separate agent hired because I live "in the middle of nowhere". I've never had to file a claim before. I've browsed through the forums here to help me out, but I'd love any advice from please who have either gone through this before or have worked on the insurance side of things.

I do have loos of rent in my coverage for up to 12 months which is what will save me here. I have replacement cost coverage with additional debris removal of up to an additional $10k. I do live in an expensive market. The code has changed since the buildings were built. The main house is in the flood plain and the ADU is in the floodway. The town will let both be rebuilt because it was a disaster situation (8 homes , plus a bunch of other outbuildings were lost in this fire), but they will both need to be elevated. I believe there is some coverage in my policy for that too.....

Will the insurance company work in my best interest or not?  How do I protect myself?  What do I need to be on the look out for?  Is it possible to change the placement of the buildings on my property (from the insurance standpoint) so that they are both in the flood plain, but not the floodway?

Honestly any advice would be appreciated.  Thanks!

P.S.  Everyone is okay.  Even the dogs....

Originally posted by @Megan Arzt :

So I had a fire destroy two of my houses. One 3 bed, 2 bath, and an ADU that is 2 bed, 1 bath. I have insurance and the adjuster just came out today (it took some time for the town to do asbestos testing and allow access). The adjuster said it looked like a total loss, but to wait on his report. He doesn't actually work for my insurance company - he is a separate agent hired because I live "in the middle of nowhere". I've never had to file a claim before. I've browsed through the forums here to help me out, but I'd love any advice from please who have either gone through this before or have worked on the insurance side of things.

I do have loos of rent in my coverage for up to 12 months which is what will save me here. I have replacement cost coverage with additional debris removal of up to an additional $10k. I do live in an expensive market. The code has changed since the buildings were built. The main house is in the flood plain and the ADU is in the floodway. The town will let both be rebuilt because it was a disaster situation (8 homes , plus a bunch of other outbuildings were lost in this fire), but they will both need to be elevated. I believe there is some coverage in my policy for that too.....

Will the insurance company work in my best interest or not?  How do I protect myself?  What do I need to be on the look out for?  Is it possible to change the placement of the buildings on my property (from the insurance standpoint) so that they are both in the flood plain, but not the floodway?

Honestly any advice would be appreciated.  Thanks!

P.S.  Everyone is okay.  Even the dogs....

 Glad to hear everything is ok.

From your description, it sounds like you will be in good shape.

The only thing you want to double check and discuss with your agent is if you to make changes to the building (raise it up) will they pay for those changes.  Most policies will pay for replacing like and kind, but not improvements. 

You had  total loss, so chances are you can build whatever you want with the $, but better to find out on the front end than after you have started the rebuild.

Good luck

I agree with @Jason Bott that you are probably well taken care of.

Depending how you have the policy set up they may pay out a couple different ways. Make sure you ask lots of questions.

Since it's a total loss you may get a lump sum check for an ACV valuation (depreciated amount) and if/when you rebuild you may be able to access the portion of the claim they held back.

Example - round numbers to make it easy. Let's say the building is insured for $100,000. On a total loss they may use a depreciated amount - something like $80,000 and hold $20,000 in reserve. Once you are completed with the rebuild they will pay out the other portion.

If you have the building insured for less than the full reconstruction cost amount - say the estimated amount to rebuild is $150k and you have it insured for the same $100k - they will probably just cut you a check for the full $100k since you are insured for less that what it will cost to rebuild (the way it was not the newly required elevated construction)

In addition to those examples above you could ask for loss of rent reimbursement and if you are forced to have extra cost to rebuild up to code (elevated) then you may have Building Ordinance & Law coverage that could pay something towards that extra expense.

*If you have the Building Ord & Law coverage it's probably 10% of whatever you have the building insured for.

If they hit you with a depreciated amount on first payout - make sure they know about any recent updates you have made to the property like upgrades to kitchen, bathroom, etc that could reduce the depreciation factor applied.

Good luck