Moving after buying Replacement House Mike Buck asked 2 years ago
Moving after buying Replacement House

My fire loss was in 2017 in California. The insurer held back the amount attributed to the land from the amount they allocated for me to buy a replacement house. They said the held-back amount could be used for repairs and renovations to the replacement house and that there was no time limit on when the amount could be used.

My work is now requiring me to re-locate from northern to southern California, and my question is if I am entitled to have the unspent amount for repairs and renovations that is still being held back by the insurer transferred to a new house I will be moving to? Basically, am I entitled to have the withheld amount used on my “new” replacement house, or it that money only for use on the initial replacement house purchased after the loss? The amount at issue is approx. $300,000.

Thank you.

1 Answers
Daniel Veroff Daniel Veroff Expert answered 2 years ago

Hi Mike,

Thanks for your question. Given the time that has passed since your loss, there is a concern about whether you would be beyond your time limit to claim any further replacement costs. Regarding the timeline, Ins. Code section 2051.5 states that for a state of emergency claim, you have no less than 24 months from the first “actual cash value” payment to collect holdback for repairs/replacement. I recommend you check to confirm the date of that payment, and then assess if you have more time.

If you do have more time to submit the claim, the answer is a bit up in the air. In my experience as an attorney, carriers typically argue that you are entitled to a single replacement home. However, there is no established law on this. The strength of your argument will depend on the specific language of your policy. The strength of your argument will dictate whether the carrier obliges, or whether you have a case to be made in the event the carrier refuses.

I hope this helps!