Anonymous asked in Business & FinanceInsurance · 9 years ago

How much money do you think will we get from our insurance?

My house was hit by a tornado and I'm pretty sure State Farm is not going to find my home a total loss because half of my home looks okay but I can tell it is not. The house is 1400 square feet and sits on 1/2 acre lot, we owe $121,000 on the mortgage. This is what I can tell is wrong with my home. The den and attic area smell from wetness (mold), the floor in the den is buckled up (also the carpet) and smells from wetness along with the big 3 windows blown out of the frame. The total roof and ceiling are a total loss, my non-connected 25x25 garage that was done in vinyl and trimmed in aluminum is a total loss (the adjustor did tell me that already). The front door and 2 windows in the front were blown in, the den, laundry room, and 3 bedroom doors were blown in. 3 quarters of the 3ft metal fence surrounding my little over a quarter acre back yard is gone and I have vinyl siding and soffits busted, and missing in various places. My power service from the pole to my house was ripped from the side of the house, when that happened the breakers in the box were yanked up into the wall and I saw water coming out the breaker box. Water was dripping from most of the fans and light fixtures the night of the tornado. My new laminate floor in the front room is nicked up and in a few spots it looks like the floor maybe dipping in. Not to mention all our stuff in the garage / game room was destroyed and all our stuff in the den was wet down and showered with glass. Along with many busted or wet down items from the yard, kitchen, and daycare room. The Disaster Assistance people have gave us the okay for a $185,000 loan and 2.5%, but you can only use the loan to rebuild what you had with no upgrades. I want to pay off our mortgage and get a new loan and build a bigger better home. With all this info does it sound like we might at least get $121,000 from State Farm.

2 Answers

  • 9 years ago
    Best Answer

    The bottom line is, no one here could POSSIBLY know how much the insurance would pay out. Here are some of the things that would factor in to it:

    1. Cost to fix the house back up ( possibly minus some or all of the mold remediation issues)

    2. Whether you have replacement cost coverage, or SF's nifty 25% over endorsement on your policy

    3. If your house is insured to value, or if a coinsurance penalty would apply

    4. if you have building ordinance or law coverage, and in the same vein, if your local building authorities would require demolition of the house

    5. your deductible amount

    6. If there's going to be a coverage issue, because of the business operating in your house (daycare)

    7. what kind of property coverage you have for your business property (daycare).

    What I CAN tell you, is that the amount of your mortgage balance, or any disaster loans, are completely irrelevant to your damages and policy conditions.

    AND, you don't get the cost to rebuild up front - you only get the depreciated value. If you don't actually FIX the damages, you're leaving a HUGE chunk of money on the table.

    Look, blown doors and windows, look scarier than the cost. That power line, is probably the responsibility of the utility company. Your fence and detached garage, are covered under "other structures", not building. I'm not hearing anywhere NEAR $121,000 in damages. Add in possible coinsurance penalties (did you INSURE your house for somewhere around $280,000, or $200 per square foot??), and depreciation for NOT rebuilding . . . I don't see it happening.

  • Bill
    Lv 7
    9 years ago

    It depends on how the policy was written but usually it will cover the cost of rebuilding. It is tied to the house and not the property. You will have to wait until State Farm completes their evaluation to know what their exposure is. If it is equal to or exceeds the balance on your loan you may be able to use the funds to pay off the mortgage but would have to work that out with the insurance company.

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