Total loss due to fire and buying replacement home Elizabeth Kupfner asked 3 months ago
Total loss due to fire and buying replacement home

My family lost our home in the Marshall Fire. We chose to sell land and purchased property elsewhere. We built a replacement home and asked the insurance to pay the extended twenty-five percent coverage. I submitted all invoices showing that we are over the initial payment and we will max out the extended coverage. Now the claim representative wants the property purchase agreement and financial breakdown  of the new property. Are they entitled to that if no insurance funds from the structure were used? We sold the old property and paid for the new property.

1 Answers
Scott deLuise Scott deLuise Expert answered 1 month ago

Dear Elizabeth,

Sorry about your loss. This question has come up many times when policyholders purchase an alternative residence. With the limited information available, I’m not sure I can give you a completely accurate answer, but here goes:

First and foremost, you must cooperate with your insurance company, so give them what they’re asking for. Second, check your policy; some, but not many, say that if you replace your property at a different location, you’re not eligible for the extended RCV supplement.

My guess is that they are fishing to see if they can deduct the land value of the new purchase from their payment. Many carriers have tried this and most have failed, because it’s not a legitimate deduction. It’s against the law.

Let us know what their response is to your transmittal, and we’ll take it to the next step if necessary.