1

Topic: Had a fire in our rental and insurance offer was insulting?

Had a fire in our rental and insurance offer was insulting?

increase your knowledge...

Re: Had a fire in our rental and insurance offer was insulting?

Is your policy an actual cash value policy (all DP 00 01 policies are) or a replacement value policy (DP 00 03 policies are this as long as you carry at least 80% insurance to replacement value of the dwelling)?  The answer to that question will have a huge bearing on the loss settlement.

So, say your policy is on a replacement cost basis (you are insured between 80% & 100% ITV - insurance to value - and have a DP 00 03 policy for rental properties).  The first check you get from the company will be an ACV check & will have what is known as a "holdback".  Once you have replaced the item with like kind & quality (the company will not pay for upgrades), you will get a check for the difference.

If you need an explanation & the policy language referred to, you should contact the adjuster.  Many people don't understand how insurance works & the adjuster should be happy to explain it to you.

Edit - must be a very small house to only be insured for $131,000 (about 1000 sq ft one story house if rebuilding costs in your area are around $130 per sq ft - but rebuilding costs in most suburban or cities are more on the line of $200+ per sq ft so you are probably extremely under insured or the house is only 655 sq ft).  If the house is 1500 sq ft (still a small house) at $200 per sq ft, you should be insured for $300,000.  Do the math, this is probably where the issue is.

Ask your adjuster, he or she can tell you.

3

Re: Had a fire in our rental and insurance offer was insulting?

Thanks you very much for your quick reply.

mohi wrote:

Is your policy an actual cash value policy (all DP 00 01 policies are) or a replacement value policy (DP 00 03 policies are this as long as you carry at least 80% insurance to replacement value of the dwelling)?  The answer to that question will have a huge bearing on the loss settlement.

So, say your policy is on a replacement cost basis (you are insured between 80% & 100% ITV - insurance to value - and have a DP 00 03 policy for rental properties).  The first check you get from the company will be an ACV check & will have what is known as a "holdback".  Once you have replaced the item with like kind & quality (the company will not pay for upgrades), you will get a check for the difference.

If you need an explanation & the policy language referred to, you should contact the adjuster.  Many people don't understand how insurance works & the adjuster should be happy to explain it to you.

Edit - must be a very small house to only be insured for $131,000 (about 1000 sq ft one story house if rebuilding costs in your area are around $130 per sq ft - but rebuilding costs in most suburban or cities are more on the line of $200+ per sq ft so you are probably extremely under insured or the house is only 655 sq ft).  If the house is 1500 sq ft (still a small house) at $200 per sq ft, you should be insured for $300,000.  Do the math, this is probably where the issue is.

Ask your adjuster, he or she can tell you.

increase your knowledge...