I had a house fire (caused by lightning) at the end of November ’22. My insurance company has been easy to work with. They are responsive and have kept the process moving forward. No complaints there. I am trying to understand my options, but my local agent has refused to walk through my policy with me. I’m hoping to find help here.
The home is an 80s design – basically two circles on two different grades connected by a walkway. One circle was completely destroyed. The other circle suffered smoke damage to the top floor, but the bottom floor is okay. Insurance’s estimate is a complete teardown of the destroyed circle, and a rebuild (leaving the studs) of the other circle. Due to the complexity of the build, this has already maxed the policy and it won’t be enough to actually cover the repairs. It would have been plenty on a “normal” home design. Lesson learned. The estimate will, however, cover paying off the mortgage and a portion of the teardown. If I choose to tear down the structure completely, is there any way to tap into the depreciated funds? I’m sure it’s policy dependent, but in general are there ways to access depreciation without replacing?
I have replacement cost for the dwelling. According to my policy, “If the cost to repair or replace is $1,000 or more, we will pay the difference between actual cash value and replacement cost only when the damaged or destroyed property is repaired or replaced.”
Thanks in advance for any advice.