I recently lost my home in the Eaton Fire and am realizing that I’m underinsured in my homeowners policy. My insurance company has just informed me that they are issuing checks for the policy limits on my claim in all categories, but we haven’t had an estimate done for how much it would cost to rebuild the house (it was a total loss) since the debris is still being cleaned up, and it’s likely that the amount they’re sending won’t be enough to completely rebuild. Does accepting the checks close the claim and/or take away any chance to request additional funds to cover the cost of the rebuild? Are there any steps I can take as an underinsured homeowner to use the money to at least start replacing our belongings, without potentially getting stuck in a trap of not being able to get more money further down the line, once we can get estimates done, from my insurance company to actually rebuild my home?
Yon Van Kline asked 2 weeks ago Hi Yon, we are sorry to hear of your loss. We are happy that your carrier has issued policy limits checks for your claim, although with the information you provided, we cannot comment on what the carrier paid for (whether it was Dwelling, Other Structure, Contents, and/or Additional Living Expense or Code/Ordinance) and whether you have any remaining avaliable funds left on your policy. We would suggest that you speak with uyour adjuster to confirm the $$ amount of the checks, what ‘coverages’ the checks were for and whether you have any remaining limits avaliable.
Typically the carrier will not wait to secure a detailed rebuild estimate if they have initially calculated your rebuild amount over your policy limits. Accepting these initial checks should not preclude you from securing additional funds for your claim, if you still have coverage and items that have not been paid for by the carrier.
Once the carrier has paid policy limits, there is nothing left for them to pay out. Unfortunately, it sounds like you were underinsured and may need to look to other sources to rebuild/replace your home and replace your belongings. UP provides several ressources to guide you through this process and options, including a recent webinar (slide deck link below) that provides info on SBA loans:
https://uphelp.org/claim-guidance-publications/underinsurance-101/
https://uphelp.org/claim-guidance-publications/buy-or-rebuild/
https://uphelp.org/claim-guidance-publications/fema-and-sba-2024-updates-overview/
We wish the best for you and your family.