Rebuilding vs Abandoning
Can you abandon the home and still receive the insurance money?
If you decide to walk away from your home and not perform repairs, the maximum you can receive is the Actual Cash Value (ACV), less the deductible. If you have a mortgage, the check will likely be made to you and the mortgage company. Any money remaining after paying off the loan will be paid to you. If your mortgage exceeds the insurance payment, you must either pay off the remaining loan or default on the loan.
Final Estimate for Our Home
Home Abandonment Scenario 1
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In this example, the outstanding mortgage is $250,000.
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We would receive $85,000 after the insurance pays the mortgage company.
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We would still retain ownership of the property because the loan is paid.
Home Abandonment Scenario 2
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In this example, the outstanding mortgage is $400,000. The mortgage company would keep all $355,000.
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We would still owe the mortgage company $65,000.
General
A hailstorm hit a colleague’s home. He paid four different deductibles for hail damage: house, two cars, and an RV.
Be sure you request the maximum amount of temporary living before the claim deadline. Our home repairs took longer than expected and we submitted after the claim deadline. We lost out on four months of temporary living expenses and the costs related to moving back.
Does the deductible for the homeowners policy apply to your car, boat, and RV?
No. These assets will be covered by their own policies. You could have to pay multiple deductibles, depending on the scenario. A hailstorm hit a colleague’s home. He paid four different deductibles for hail damage: house, two cars, and an RV.
Does insurance settlement include the cost of temporary living?
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Temporary living for up to one year is typically included in a policy. This may include the move out, the move back, and storage of items salvaged from the home. Your policy may allow you to spread the living expenses over two years if the disaster is a federally declared disaster. The amount of money is the same, but the funds cover a longer period.
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Your insurance company may lease a property for you or provide you an allowance for temporary living. This determination will be based on your family size and cost of living in your area. Receipts and lease paperwork may be required.
What if you don’t have flood Insurance?
Homeowners insurance does not include flood insurance. Wind and water damage may be part of your homeowners policy. Even if you do not have flood insurance, you may be able to receive some coverage for wind and water damage.
What is the difference between water damage and flood damage?
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Water damage is usually caused by something on the inside of the house: plumbing leaks, backup from a toilet, or an appliance failure.
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Flood damage is usually caused by water originating from outside the home from a hurricane or heavy rain event.