Home Insurance

[Izzy]

Hi everyone...

 

I've googled my question but I am not getting the answer I need, so I thought I'd ask you lot.

 

I have home owner's insurance and the damage, according to the adjuster who came, is about 10K.

 

My deductible is a bit less than 2K. The first check is going to be about 5K.

 

The adjuster said that since I am ging to sell, I don't need half of the things done that he accounted for. I know it is very possible that the work may be more than 10k, but lets say he's correct and that the work I get done to make my house sellable is 6K...

 

Do I have to send back the 1K leftover? I know I could tell them, "I've only had half the things done that I need to, so send the rest of that $." But...will my bank be on me about the repairs as well? Will they send someone to look or will they be happy with receipts?

It would be nice to keep a bit of the cash in case the buyer has a problem with something.....

[kidblast]

AFAIK once they determine the amount of coverage for the loss.. they cut you a check. from there it's your issue to manage what is done, and the cost YOU can get the work done for. I've never had a audit done on what they paid out to what we recovered.

 

In other words Izzy, I've never had to "give anything back", and I did come out a head once or twice. but not usually! :)

[Dennis G]

Izzy,

I have (unfortunately) an experience with this. Several years ago we were burglarized while away on a holiday weekend. The Insurance Adjustor took our word for what was taken (mostly small electronics, CD's, etc.), wrote us a check for the current replacment value and said goodbye (oh yeah, and get an alarm system). Didn't care what we did with the $, just settled the claim. I know I didn't replace everything as it was, but did pretty much spend all their (my) money. Point is, you pay premiums, they pay claims, who cares what happens after that except you?

[gdecantoo]

Hi Izzy,

 

Keep in mind the adjusters job is to pay out as little as possible. Did you get your own estimates?

 

The fact you may be selling your house should not be a factor. It should be repaired as it was before the damage.

 

Had a house fire in 91' and I have a pair of old boxing gloves if you need them!

[Riffster]

^^^What he said, does not matter to the adjuster what you are doing with your house, they have to pay you for the full damage minus deductible then you can do whatever with your money. Do get your own estimates because they will low-ball you.

[BobF_]

A few years ago I had a storm damage claim. The insurance rep came out, took photos and provided their own estimate. Once the work was done, they came out and inspected to make the work was done and THEN cut a check.

 

Part of this may depend on whether or not you have an outstanding mortgage, which would mean you have a lien holder that would be required to sign off as well. Protecting their collateral.

 

Just ask your insurance rep for a run-down on the entire process.

[Izzy]

Thanks guys.

 

I do intend on using the money to fix the house and hope the bank doesn't give me too much trouble. I will get a handiman and a floor guy to come out and give me an estimate as well as painters.

 

Mostly I was interested to know if the insurance kept an eye on me (which most of you agree they just move on with their lives after they cut that check) and if the bank is a pain to deal with or if they're going to let me get things done so I can carry on with my improvements.

[badbluesplayer]

Usually the insurance company doesn't necessarily care what you do with the money but the bank does. They want to make sure you don't let the house go and then they're left holding the mortgage. They own the house with you, so it's like being married and you have to get your partner's permission on what to do.

[Twang Gang]

Probably should spend all the money on getting everything repaired. Not because the insurance company or the bank are going to come after you, but because whoever you sell the house to is going to have it inspected after they make their intitial offer. Then the inspector they get is going to say "well there was a fire or a flood or whatever and x, y, and z need repairs". The buyer is then going to want to lower their offer to cover what their inspector said needs fixing. Or if the list is too long, they just retract their offer altogether.

 

If you were not planning to sell the house, you could keep the entire $10K and not do anything as long as you could live with the conditions. What Bad Blues is saying about the bank caring is true if the mortgage is with a local community type bank. But most big national banks (there are only about 4 left) have sold the mortgage to a servicing company or bundled it into a mortgage backed security and really could care less about your house, as long as the payments are on time.