Insurance payments during building Valerie Richard asked 4 months ago
Insurance payments during building

My home was lost in the Marshall Fire and I have replacement insurance through Country Financial.

I understood that CF would pay as the builder invoices me, but was just told that only the “limit of liability” funds on my policy would be paid, and the rest would be paid in recoverable depreciation AFTER the house is completed. So once I exhaust the funds they have paid, I am not sure where I am supposed to get the remaining funds for the rebuild as it progresses. They have agreed to pay the total budget for the build, but not all of it until the house is finished. Is this normal?

The depreciation amount is $362,022.

Any advice is appreciated – the house is currently under construction.

1 Answers
Scott deLuise Scott deLuise Expert answered 4 weeks ago

Sorry you’ve been waiting so long for an answer. You should not have to cash flow your loss. Country Financial should pay you the depreciation at the time you contract with your GC, as by any definition, it’s incurred. We strongly encourage you to file a complaint with the Colorado Department of Insurance as there is no reason for the insurer to be withholding the full amount of benefits since construction is underway. By citing to the “limit of liability” language the insurer is only telling you they will not be paying more than the limits in your policy. For your protection, we do recommend having an experienced construction inspector confirm work has been completed properly to date before issuing further payments to the builder.

If you have a mortgage, your lender will most likely escrow the funds anyway, so CF shouldn’t have any concerns with you running off with your own money and not spending it on your house rebuild.

Hope this helps!