I have fire damage that exceeds policy limit, does insurance company have to pay the difference?

Question

My fire insurance policy is for 50,000; however the damage is in excess of 85,000

Answer 1

Maybe they will look at it like they do automobiles.  Is the $85k less than the value of the house (pre fire of course) and is it worth it to make the repairs.

Talk with your assessor and see.  Sometimes the weight of the assessor to his\her boss can make a huge difference on if they will help.  Also, how long have your been with them?  Being a long time member is a huge plus in that area too.

Best of luck.

Answer 2

Most likely not.

Under the extremely remote chance that you have some kind of "guaranteed replacement cost" endorsement, they are usually conditional upon you insuring to adequate limits in the first place - which you didn't.  

I have no idea why you underinsured - probably to save money.  Sorry.  

It gets worse.  If the damage isn't a total loss, you're not going to get $50K out of it, either.   You'll get the percentage that you insured for.  If you have a 100% coinsurance clause, and insured for 25% of the cost to rebuild, you'll get 25% of the damages - $22,000.  Less your deductible.

Answer 3

unless you have guaranted replacement value on the insurance  (which costs extra) they only have to pay the $50,000

Otherwise I would only insure my $6,000,000 house for $1000.

Answer 4

No insurer will pay more than the policy limits.

Answer 5

No.  That's what "policy limit" means.

Answer 6

Since the policy limit is $50,000, that is all they have to pay. It is a contract. Check with your agent to see if you paid for a guaranteed replacement cost endorsement. However, even with that endorsement, it normally only covers an extra 25-50%, which would still leave you short.

It looks like you might just be stuck. Its a good idea to keep up with your insurance and make sure everything is in order BEFORE the claim happens.