I had no real idea what was covered and what wasn’t covered. I needed to have the home insured to satisfy my mortgage and so, I figured what was good enough
for my mortgage holder was good enough for
In hindsight, I was very lucky to have co-workers who had experience with insurance claims. One person was in the middle of settling with an insurance company after a major fire and another had been through a major earthquake claim. The job I had at the time pretty much sucked, but I have always felt that the real reason I ended up there was to get the guidance I needed to get me through something no one else in my life had ever been through.
A couple of highlights you might want to look for when you check your insurance policy.
What kind of living expenses get covered if you are unable to live in your home?
I had one year of housing costs coverage and I used eleven months of it. Yes, eleven months
fully paid for at the Residence Inn living in a room that resembled a studio apartment with a full kitchen. There were times I actually liked being there, but mostly I wanted to go home. Yet I was lucky. I talked to people staying at the same place who had lost their entire house and everything in it and only had six months of living expenses covered. One couple I remember were going to have to move in with family and friends because their house was nowhere near completion and their insurance coverage was done. By the way, even when your house is in shambles, you still have to continue to make your mortgage payment. A fire doesn’t stop that, so if you can’t afford to pay a mortgage AND rent an apartment, make sure you have living expenses covered in your policy.
What is the difference between replacement and full replacement?
This one gets REALLY tricky. Replacement means they will replace everything you had in your possession and put the structure back the way it was. Full replacement means they will replace everything you have, no depreciation costs and put the structure back up by current day standards.
To give you an example of where this got a little funky. The garage, like my home, was built in 1948. At that time, it was fine to build everything with 2 X 4s. Today’s building codes say “No Bueno.” It must now be 4 X 8s. The Evil Empire, as I called my insurance company, said I had to pay the difference for the cost of the larger lumber. The figure $2,000 coming out of my pocket comes to mind, since every time there was some kind of problem, some contractor would ask to speak to me outside and say, “Sorry, but this is going to run about $2,000. “ By the end of this ordeal, I would just say, “Don’t tell me. Let me guess. This is going to cost $2,000.” And the contractor would look at me wide eyed and
say, “How did you know?”
I probably would have eaten the $2,000, but my public adjuster stepped in and made a great point.
By law, they had to put the garage back up. By law, it had to be to code. So guess what? They would
have to do it the right way regardless of what it had been the past.
Lesson learned. This was the same Evil Empire, who early on, said they did not have to replace the whole roof of the house, just the half that was burned. The fact that none of it would match was of no concern to them. We won that one too. But remember, you are in good hands!
Another little bit of information I had no idea of, but EVERY item you expect money for has to be listed and inventoried. Every screwdriver. Every wrench. EVERYTHING! Then once they agreed to it, all the items had to be purchased by me and then reimbursed by them. If it didn’t get bought, there was no money coming for it.
The only exception was moving my items out of the house and storing them. They offered to take care of it all and gave me a very expensive quote for it. We told them great, give us the check and WE will take care of it.
I found cheaper movers and a lot cheaper storage and put the extra money aside for all the things that went wrong during the process that they didn’t want to cover.
One more tip. If you are going to move and store your items, get a self-storage locker that you have the key to. There are dozens of horror stories of moving companies loosing or just destroying entire
households. The other nice part was I could get stuff out I needed without having to go through anyone else.
Next up, what is it really like to spend 11 months in a hotel?