House fire - not enough insurance money to rebuild?

Question

We had a house fire back in April of 2007, since the house is still standing, but destroyed inside the homeowners insurance company considered it a large loss not a total loss. Meanwhile we have had nine different contractors come in and evaluate the damages and they all say $225,000 and up, and the homeowners only gave us 120,000. What we did get from the insurance company we had to turn over to our mortgage company, and they are controlling it saying that we cannot do the work ourselves it has to be a major contractor, and since no major contractor will touch it for that small amount we are between a rock and a hard place.

Any suggestions??? Meanwhile we are renting at the moment somewhere else, since the house is defintely not liveable.

Thanks, Jean

Answer 1

I'm sorry that I don't have any suggestions for you, however, I'm in a similar situation so I feel for you. I am so shaky mad right now at our mortgage company for not releasing the funds. I have Amish from our area lined up to do the work on our barn but now the bank won't release the funds because they are not major contractors & can't fill out a W-9. We were planning on helping as well to help offset some costs. However, the insurance company won't give enough money to hire a major contractor. So frustrating. I do not think this is fair! My thoughts are with you & your family as your situation is much more serious than ours. I hope things look up soon for you. Best Wishes.

Answer 2

Jen you need to talk to your agent.  WHY did the insurance company only pay you $120,000?  Was that the total amount of insurance you bought?  If so, you're uninsured for the rest.  

Sorry, no where near enough details here, but YOUR AGENT should be the one giving suggestions.

Answer 3

It is right that once they start the work the insurance company may pay more as they find they need to for other things.   What was the limit on your insurance policy?  

Why is the mortgage company keeping your money hostage?  Call your insurance claim rep for help.    If you need more help than that then call your State Insurance Commissioner.    I don't believe the mortgage company has the right to pick your contractors or hold your money hostage.

Also, is your insurance company paying for the house you are renting in the meantime?  Most of the time insurance companies pay for that temporary housing.

Please give more info for more help.

Answer 4

contact your adjuster and talk to him and let him know the estimates.  He can explain why they paid what they did and how getting replacement cost works. more than likely they are paying you actual cash value.  once the work is going, they will start to make up the difference for replacement cost.  you can get the work started for what you were paid, and as each contractor gives you receipts for work done, the insurance company will pay out replacement on it.