We had a fire that was not quite a total loss. Repairs are 320k and seem to be missing multiple items as we had no power and things like the well and wood boiler froze and are missing from the estimates.
They calculated the actual cash value of the house at 245k which I think is a little low but not that low. We recieved two options. First one is we have the house repaired and they pay for everything. Second option is take the 245k and do what we want. We were told that it doesn't matter what the repair costs turn out to be after adding missing things they will only offer the payout to be a maximum of 245k.
So if someone chooses to do the repairs themselves or not to do the repairs at all is it normal to cap what they will give you at acv of the house even when they are willing to pay well above acv to a company to do the repairs? I am in New Brunswick, Canada.
Edit: we have a limit of 600k on the policy and it is a replacement value policy. It would probably cost 400k for a full rebuild if it was a total loss.
House insurance payout will not offer more than acv of house.
byu/killmak inInsurance
Posted by killmak
4 Comments
Yes, that is normal.
The difference between RC and ACV insurance companies often refer to as the hold back and they won’t pay that amount until everything is finalized and the final bill is presented usually
The first check is the actual cash value and then when you actually replace everything they pay the difference of the replacement cost and actual cash value. This is a policy document that is guaranteed in your policy. The only other thing is if it is a ToTAL loss and you are in a. Valued policy state. If that is the case, they owe you the entire limit of the policy only in a total losss
Yep totally normal. You only get replacement cost if you actually replace. ACV if you just take a payout. It works the same way wit partial claims too though. You get the ACV check initially and then once repairs are completed you get the recoverable depreciation.