Fires and homeowners insurance ... How does this work if

[2Driver]

Since we’re on 10 acres of natural desert, the recent fires have me thinking. Many of the places were beautiful and I would not want to rebuild a home if the landscape was reduced to ash.

So, how does the claim process work if you dont rebuild? I tired to pin down State Farm on how it works and how they payout. I could not get a straight answer out of them which leaves me feeling like I would get screwed. Anyone know for sure?

 

[dribble]

You still own the land. Ins will pay to replace the house and other real property improvements that were destroyed by the fire. They are obligated to give you what you had, not what you now want.

 

[hallett21]

You still own the land. Ins will pay to replace the house and other real property improvements that were destroyed by the fire. They are obligated to give you what you had, not what you now want.

This. A lot of dirt still for sale in Malibu from last fire. A lot of it is due to people being under insured and not able to rebuild their -970 house at today’s cost.


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[2Driver]

Not the issue, I know about the dirt.

Its about the home, the insurer balks on the pay-out amount when you don’t rebuild. If your structure is insured for $800k to rebuild, they don’t just hand you a check for $800k. State Farm won't say how much they would pay out if I didn’t rebuild nor would they even say how the process would work.

 

[530RL]

Completely depends upon the policy language which is why it matters to read the policy.

With respect to if you have a loan on the property, whatever the eventual agreed upon amount, the Lender gets first crack at the cash if you do not rebuild as a pay down on the loan. Pretty standard in any mortgage or deed of trust document.

Even if you do rebuild, the lender will probably escrow the insurance proceeds to make sure it is used towards rebuilding their collateral.

 

[Cole Trickle]

Insurance companies want you to rebuild the home so you get back to where you were prior to the loss.

They won't cash you out. Lets say you have a large mortgage on the property they write you a check you decide not to rebuild and default on the mortgage. Now the Mortgage company is screwed. (obviously being paid off would be different butb i still don't know why you wouldn't rebuild and sell for more $$$)

I had a client turn in a wind claim for 40k worth of damage to a block wall. They wrote him the check he paid some homedepot workers to remove it for a couple hundred and put up a $2000 chain link fence. He was pretty surprised when they followed up and asked that he complete the work or return the money.

Insurance is not for profit.

 

[Taboma]

After our home burned in 07, we purchased a 5th wheel trailer with the temporary housing money, set it up in our driveway, built a nice deck and BBQ and then started looking at our options. Due to the suffering economy we wanted to check out he foreclosure opportunities and honestly, heal a bit mentally, not just rush into anything.
We ended up re-building, but here's one thing that hasn't been mentioned by the other posters.

Depending on your policy, there's more rebuilt dollar available than the stated policy amount. These "Additional" funds kick in for various code upgrades and in CA title 24 requirements. Our original home had been built in early 70's, obviously numerous codes had changed, as well as Title 24 energy upgrades, then required sprinker system, then various upgrades mandated by various 'Wildland Interface zone' codes that were enacted right after the fire, some while we were rebuilding.

What we wanted to build didn't initially matter, first we had to get a bid for rebuilding essentially what we had, with all the various code and energy required upgrades itemized. In our case this was relatively easy, since right after the fire, the original spec builder who still lived in the immediate area, came by with original blue prints and was anxious to work with us on the rebuild. So the stated policy amount was maxed, out and most all of the ADDITIONAL monies that may or may not kick in based on the criteria I've mentioned.

We waited for a long time, looking and looking, in the end we decided to rebuild. In truth, my suggestion was to take the money and immediately move to Costa Rica, wife with two votes (Apparently) out voted me, we stayed.
Had we not rebuilt, those EXTRA monies would not have been paid, only the direct cost of replacing the original house in today's dollars, no code or energy upgrade $$.

Insurance company was great to work with, once I got with the right adjuster, first guy was all like " OK, do I have a deal for you" --- I immediately called his boss and said, please understand, we just had our home burned to the ground, I'm in no mood to be playing games with the Cal Worthington of Insurance adjusters. He said, how about if I handle your claim, awesome and we all lived happily ever after.

So bottom line, there's shall we say, hidden $$ available for rebuilding that won't be if you purchase another home. In our neighborhood, only one out of 13 owners took that route. The only guy who's pissed today, is the guy living across from me in a home built in 1973 that didn't burn. AND Hell No, I do not want to do it again, ever.

 

[HALLETT BOY]

I just sold a home in So Ca , the buyers ended going with Lloyd's of London , wasn't cheap . I've heard that insurance co's are canceling and leaving people in a lurch right now in Ca .

 

[Taboma]

I just sold a home in So Ca , the buyers ended going with Lloyd's of London , wasn't cheap . I've heard that insurance co's are canceling and leaving people in a lurch right now in Ca .

The insurance company that paid our total loss claim in 08, cancelled us early this year, only explanation was "No longer meets our criteria, bye bye" --- I made two phone calls, got better quotes from the both and finally went with the one we had all our vehicles and watercraft insured with and saved a bundle by having it all under one roof.
So the one thing we'd feared, ended up better off than before.

 

[jadenchick]

Yes, they are. We just received notice from Pacific Specialty that they are non-renewing us in December due to extreme wildfire hazard. We’ve never ever had any kind of claim on any policy we’ve ever had. They gave me the option to stick with them but they would not cover fire! LOL.

So I’ve been looking and looking and keep getting denied coverage bc I’m close to the Cleveland in Corona. I live in a neighborhood and not somewhere desolate.

 

[2Driver]

Good info here. Forgot to say my home is paid for.

What does insurance care, I paid my policy you owe me X. If I total my car and I own it, I get a check and don't have to buy a new car.

I don’t want the hassle of spending the next year or 2 of my life building a custom house just to have a worthless home in a bbq pit. Why wouldn’t they pay for a new home on another lot or existing home.

Crap at this point I should just self insure the home and collision damage on cars I’d be better off.

 

[Cdog]

Good info here. Forgot to say my home is paid for.

What does insurance care, I paid my policy you owe me X. If I total my car and I own it, I get a check and don't have to buy a new car.

I don’t want the hassle of spending the next year or 2 of my life building a custom house just to have a worthless home in a bbq pit. Why wouldn’t they pay for a new home on another lot or existing home.

Crap at this point I should just self insure the home and collision damage on cars I’d be better off.

That’s always been a concern I have over living in the mountains around pines. You move up there for all that, not to live on a burnt out cinder moon scape.

 

[C08H18]

Insurance may be Newsome's latest approach to keeping you and your tax dollars in CA (can't sell and move). I wouldn't be surprized to learn that he has ownership in these ripoff ins companies.

 

[Taboma]

Yes, they are. We just received notice from Pacific Specialty that they are non-renewing us in December due to extreme wildfire hazard. We’ve never ever had any kind of claim on any policy we’ve ever had. They gave me the option to stick with them but they would not cover fire! LOL.

So I’ve been looking and looking and keep getting denied coverage bc I’m close to the Cleveland in Corona. I live in a neighborhood and not somewhere desolate.

Just curious, did you serve in the armed forces ? USAA wasn't going to hesitate in writing us after our company dumped us. Also I'd read that due to many having this problem (Thanks for the state in putting out that report designating so many areas a wildfire hazards --- fuckers !!! ) anyway, I'd read where you can purchase separate fire insurance through some state program. Maybe that's why your company is now excluding fire ? I was going to look into it, but didn't have to, State Farm stepped up for us and saved a bunch.

 

[Mr. C]

Insurance may be Newsome's latest approach to keeping you and your tax dollars in CA (can't sell and move). I wouldn't be surprized to learn that he has ownership in these ripoff ins companies.

While I agree he is a scumbag at the highest level. I thought Cali passed something that did not allow termination for x amount of time or without cause. I’m probably wrong as I am often am.


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