We lost our home in the Eaton Fire. Our insurer has paid our Coverage A limit, and its Xactimate/rebuild estimate confirms that our rebuilding costs will exceed our main dwelling coverage plus ERC coverage.
The insurer’s corporate policy is that ERC funds will only be paid as costs are incurred, on a reimbursement basis, after the “repairs” are completed. We have an executed construction agreement, but the insurer does not recognize that agreement as an incurred cost. They are also aware that we cannot defer installment payments to our builder.
We requested that our ERC funds be placed in escrow with our mortgagee, but that request was denied.
Their position is that it is our responsibility to front the expected ERC proceeds using either our savings or, as our adjuster told our broker, our SBA loan.
We are currently waiting for the insurer to provide written instructions explaining how this policy is administered, including inspection requirements, proof-of-cost documentation, and the process for obtaining reimbursement.
Is this policy legal? At what point does an insurer’s reimbursement policy effectively obstruct a policyholder’s ability to rebuild and return home?
