General Homeowner (HO) Insurance Claims Info

User Forum Topic
Submitted by CarlsbadMtnBiker on October 23, 2007 - 1:16pm

(intended for those who have or will be submitting claims under their HO policies due to the SD fires)

1. Most HO policies carry a mortgagee clause requiring them to name the lender as a loss payee on the check. This is required by law and the lender determines how it will endorse and/or disperse funds to ensure their investment is restored.

2. Many carriers offer extended replacement cost coverage by endorsement than extends Coverage A (your primary building coverage) up to 175% with a FEMA trigger for major disaster - I believe that trigger has already been pulled by President Bush. Otherwise the typical extended replacement coverage is 135% of Coverage A.

3. Additionally, by endorsement, many policies offer inflation protection which prorates all your policy limits up each month until your next renewal.

4. For a home destroyed by fire, the Actual Cash Value is determined by market value (RE Appraisal minus the value of the land) or a rebuild contractors estimate less depreciation, which ever is greater.

5. Depreciation (for all losses incl minor repairs) can only be taken on building materials subject to normal repair or replacement during the useful life of the home e.g cannot depreciate the framing, rough plumbing, etc.)

6. You can rebuild elsewhere are still be entitled to Replacement Cost Coverage.

7. Most policies offer coverage for hotel, additional expense for up to 2 weeks for a civil authority action (e.g. evacuation) many times without taking a deductible.

8. Additional Living Expense coverage has been extended on most policies to 24 months and also gives you the option of electing a Fair Rental Value Option (FRV) that allows you to take payment based on the fair rental market value of your home without the need to submit any documentation/receipts. Recommended if you are staying with family or friends vs. when you are incurring a temp rental expense or hotel.

9. Don’t hire the services of a Public Adjuster (PA) who will take 8-15% of your claim dollars doing the same thing your own assigned adjuster does for free. Give your insurance company a chance first and hire a PA when and if you have issues with your insurance company.

10. Stick with local contractors with long standing reputations for the rebuild of your home.

Stay safe out there !! ….

‹ current maps of fires Could Calif. fires draw a line under housing crash? ›
Great info. I think the key
Submitted by betting on fall on October 23, 2007 - 1:52pm.

Great info. I think the key one for San Diego now is #7- hopefully its the only one that 99.99% of the evacuees will need:

"Most policies offer coverage for hotel, additional expense for up to 2 weeks for a civil authority action (e.g. evacuation) many times without taking a deductible."

I believe this is outlines
Submitted by Raybyrnes on October 23, 2007 - 4:03pm.

I believe this is outlines in the "Loss of Use" section of your policy.

In regards to #4 4. For a
Submitted by Cow_tipping on October 23, 2007 - 4:11pm.

In regards to #4
4. For a home destroyed by fire, the Actual Cash Value is determined by market value (RE Appraisal minus the value of the land) or a rebuild contractors estimate less depreciation, which ever is greater.

I am not sure if it has changed in the last 10 years, but the house this friend of mine bought in Pleasanton CA was assesed at 365K as value of the land, and 359K as value of the land + improvements. Now he didn't even notice it till I pointed it to him and they said that his place is in a prime location and hence is rezonable into a retail and that means $$$, and the fact that his house is there is a disadvantage (in a more flowery language)
You burn that house down and the insurance company owes you nothing ??? probably, but you'd ahve a hard time explaining the crumbly house burning down all by itself.
Cool.
Cow_tipping.

If this was true, why would
Submitted by sandiego on October 23, 2007 - 4:50pm.

If this was true, why would he bother with insurance?

We own an abandoned, tear down building in North County. The cost to demolish it is $30,000. We only have liability insurance and I would love it something happened to it.

cow_tipping .. to clarify
Submitted by CarlsbadMtnBiker on October 23, 2007 - 6:03pm.

cow_tipping ..

to clarify further, the Actual Cash Value is determined by market value which is assessed quickly by a licensed RE appraiser minus the value of the land. The actual home/building is the "improvement" to the land. The land is simply the raw land or lot value.

Although the insurance company needs the "market comparison" approach, if they used a "cost value approach", then the improvements would more accurately be assessed based on the cost to rebuild. However, they get the rebuild cost from a builders (Licensed General Contractor) type estimate which is as accurate as you can get as these are the guys that are going to swing the hammers.

Also remember that the insurance company will pay the greater of the appraised value (improvements only) or a rebuild contractors estimate less depreciation.

----------------

Also on a separate note,

If you have any problems with your insurance company, you can call 1-800-927-HELP or www.insurance.ca.gov - CA Ins. Commissioner Steve Poizner is very consumer sided and will ensure any carrier with repeated complaints gets their act together.

For those who lost their
Submitted by Bubblesitter on October 23, 2007 - 11:56pm.

For those who lost their houses, my thoughts are with you.

With the rebuilding, you will need to aggressively stand up for your rights. Complain if needed directly to the insurance commissioner. You will have to be very proactive.

This is a very sobering story from Bloomberg

http://www.bloomberg.com/apps/news?pid=2......

Victims of the Cedar file were victimized a second time around. Insurance companies will be slow-rolling and nickel&diming all the way out.

Good luck.

Bubblesitter

Here's the clickable
Submitted by Bubblesitter on October 23, 2007 - 11:59pm.

Here's the clickable link

http://www.bloomberg.com/apps/news?pid=2...

To my fellow San Diegans, if
Submitted by CarlsbadMtnBiker on October 24, 2007 - 8:48am.

To my fellow San Diegans, if you have lost your home, I am very sorry for your loss. If can be rebuilt and the underinsurance problems of the 2003 Cedar fire should be much less on this one. The CA DOI made some good changes ... bottom line ... know your actual coverage limits and all the benefits you have coming...

File that claim to get the process started and know your actual coverage limits ........

Most polices also provide an additional 5% above and beyond the Coverage A (building) for debris removal, 10% for building code upgrade requirements and 5% for trees, shrubs and plants. Ask your insurance company to provide all of these limits in writing with proration for inflation (if applicable.) Also request a certified copy of your policy on day 1. These requests alone will serve to convey the message that you intend to claim all benefits available to you.

For Example, a policy with $500K in Coverage A would actually have $875K after the applying the extented replacement cost coverage now triggered by FEMA. Additional to this would be another $43,750.00 for debris removal, $87,500.00 for code upgrades, and $43,750 for trees, shrubs and plants.

Finally, most policies give a straight 10% for appurtenant structures (detached garages, sheds, barns, fencing, walls, etc.) In this example, it would total $50K.

Total available coverage excluding personal property and additional living expense = $1,100,000.00

Stay safe out there !! ….

-CMB