If a $500,000 home burns down how much could the owner lose out of pocket?
It burns down cause the stove was left on by mistake. The owner has insurance.
Is it possible the owner could lose over $100,000 even with insurance?
- StephenWeinsteinLv 76 months ago
Almost $500,000. Just because someone has insurance doesn't mean that person has enough insurance. For example, if the person had only $20,000 of insurance and a $5,000 deductible, then the person would lose $485,000.
- Trivial OneLv 76 months ago
Sure. If the building and contents coverage wasn't sufficient to pay the full re-build and replacement costs, the owner has to pick up the rest. There are also deductibles (though that wouldn't be nearly as high as $100,000).
- Casey YLv 76 months ago
Easily. Its not so much that they would get scammed or something like that. Its that they probably don't really understand the full replacement value of all of their stuff and they leave things out.
- SlumlordLv 76 months ago
Depends on their insurance but if the insurance didn't cover their personal belonging, ofr example, those can add up to a lot - possibly 100k in a 500k house.
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- ArimatthewdaviesLv 76 months ago
Most homeowners insurance has a deductible so you're going to lose your deductible. After that the homeowners insurance has to restore the value of the home. Especially if there is a lienholder however you may have all kinds of furnishings and clothing inside the house and most homeowners insurance only covers about $20,000 4 clothing and furniture. I can see where it is possible to lose money because of a fire.
- PLv 76 months ago
Insurance companies don't insure for the value of the land of a house only the construction cost. When a disaster happens you don't just get a check for the real estate value of the house, you get money toward repairing\rebuilding the house. As such cheaper insurance often under-insure for what your real construction costs might be in such a situation, so yes it is possible if you don't have your insurance setup right. Insurance agents know they might lose your business if they come in too high so they often just give you the bare minimum insurance unless you specifically ask for more.
- Anonymous6 months ago
I just pray it never burns down. In Jesus name.
- Anonymous6 months ago
If the house is determined to be significantly underinsured the insurance company may cover only part of the loss
If you have lots of high valuable contents, those are typically limited to how much the insurance company will cover without an additional rider
- .Lv 76 months ago
depends on coverage bought for said home
- SimplytheFACTSLv 76 months ago
yes, deductible, under insured, etc..not to mention replacement of items.
does insurance only cover depreciated value? or replacement value?