coverage above policy limit mfamiletto asked 2 years ago
coverage above policy limit

I lost my house in the Marshall Fire (CO). My policy limit for dwelling is well short of what will be required to rebuild. I received a construction estimate to rebuild the same house which is about 100K above the policy limit including the 20% extended coverage. Also, there were some updates to the house (bathroom renovations and HW flooring) which were completed just prior to the fire. Can either of these be used to try and get additional insurance funds?

It appears the SBA includes the contents payout in their calculations for a loan to help get the dwelling rebuilt. Is this correct? I’ve asked them but have not received a response yet.

Thank you!


1 Answers
Scott deLuise Scott deLuise Expert answered 2 years ago

This is a common question insofar as applying other coverages to make up for a shortfall in your extended replacement cost limits.

I’m not familiar with SBA guidelines for dwelling loans, but I would be surprised if they expected you to not replace your personal property and use those funds to rebuild your home. But, that’s what some of your neighbors have decided to do, at least to the extent that they are over policy limits on their contents coverages and can collect the replacement supplement without spending the money on contents.

As far as more insurance payout because you’ve remodeled recently: they will not raise your limits of coverage, but they should take less depreciation. In your case, that should not matter, as you’re replacing the home. I wish there was better news, but if you haven’t paid an increased premium, you cannot expect an increased coverage.

Best of luck in this horrible situation.