Bill Quickel's - Insurance Plus Agencies Inc. Blog |
 Most of the time, homeowner's insurance pays to repair or rebuild a damaged home so its owners can continue to live there as they did before the loss occurred. Sometimes, though, you may prefer to take the insurance money and move somewhere else instead of rebuilding. Several factors determine whether this is possible and how much money you receive. Mortgage
If you have a mortgage on your home, you are not the only owner. Your homeowner's insurance company must represent all the owners, including the lender, on settlement checks. You will not be able to cash any check with the lender's name on it unless the lender endorses it, which is unlikely. The lender has invested money in your home and wants to ensure it is repaired so its investment is secure. Total Loss If your home is destroyed and the settlement amount you receive from your insurer exceeds the outstanding balance on the mortgage, you may be able to sign the check over to your lender to pay the balance due. If there is any settlement money left after satisfying the mortgage, the lender will issue you another check for your portion. Some lenders may not do this; they may insist on rebuilding the home. You must do what the lender demands. No Mortgage If you own your home without a mortgage, the settlement money is entirely yours. You may want to repair partial losses to your home to keep it safe and functional and retain its value, but if you prefer to take the money after a total loss instead of rebuilding, you can. Your local government may insist (Ohio Revised Code) you clean the debris from your old home off your parcel, but otherwise you can take the money and run, so to speak. Actual Cash Value If you choose not to rebuild your home, you may receive a smaller settlement amount than if you were to rebuild. Homeowner's insurance is settled as actual cash value, meaning settlements are diminished according to depreciation, unless you have a replacement cost endorsement. However, many insurers don't pay replacement cost unless you actually replace the damaged property. Therefore, if you choose not to rebuild your home, you may only get an actual cash value settlement. By Stephen Hicks, eHow contributor In simple terms - Your insurance company is trying to protect you and other insureds by safeguarding losses. Intentional fires or claims could drive up premiums. For More information on Protecting your home contact Bill Quickel's - Insurance Plus Agencies Inc. 740-992-6677 114 Court St. Pomeroy, Ohio 45769
5 Comments
Nancy Burns
4/3/2019 09:50:47 am
Hi! Your no mortgage statement and actual cash value confuses me. It's me not you! My house burned down. I have received my insurance settlement. May I sell the lot and keep what I have received? Or as in your actual cash value phrase would I need to return some of the settlement monies back to the insurer? I do not know what an actual cash endorsement is. I do realize I would forfeit the 20% additional I might receive in the policy to bring my new home to like kind standard. Thank you!! 8/9/2019 09:59:36 am
That's a good point that if a home is owned through a mortgage, so the lender will require repairs for the home to remain a secure investment. My brother is about to buy his first house. He'll have to find a good homeowner's insurance plan so he can protect his new home.
Jenny Smith
1/27/2020 08:01:26 pm
My house burnt 2 years ago the 27th I have replacement cost and I moved a double wide on my lot. My insurance made me make a list of my personal property I could not remember what all was in my house I'm 74 and lived there over 50 years. Now they tell me my case is closed because it's been 2 years. Can they do that?
Donna Flores
5/17/2020 09:34:08 am
My neighbor in front of me had their house burn out completely 2 months ago.The mess is around yard and has not been mowed at all the grass is almost a foot high..what can I do to have them clean up. 6/19/2020 11:23:35 am
Thank you for explaining that you must do what the lenders say. If they want you to knock down the house and rebuild it then you have to do that. I hope that more people come to realize this so they can plan ahead for what their lenders may want them to do. Leave a Reply. |
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