1. Contact Insurance Company – meeting with insurance adjuster to get funds for the rebuilding process started.
2. Set up a construction re-build account at your bank. Keep funds for rebuilding and replacement of household goods separate from your general checking account.
3. This may be necessary later for the insurance company for final payouts, taxes, and property tax evaluation or reassessment.
a. Determine extent of insurance coverage with your adjuster. a. Policy Limits – Coverage amounts / settlement guidelines Do not do a final settlement until all costs are determined and project is completed.
b. Is there a replacement clause or just a fixed limit in the policy?
c. Does the policy have a “code up-grade” clause to allow for changes in the codes to cover the additional cost of new building requirements?
d. Does the policy cover the design professional and related costs for locating and printing previous permits and plans to establish a basis for re-building? This will also be an aid to you as to what will be required by government agencies for the re-building process.
e. Determine procedure for payment to the contractors. Does the insurance company pay the contractor directly, or do you submit bills to them to be paid, or do they send you a check, and you pay the contractors?
f. Does the policy cover “out-of-pocket” living expenses, and if so, for how long? The re-building process will take between one and two years before you will be able to return to the pre-fire residence. Allow 18-24 months for relocation offsite.
g. General insurance policies will cover all construction and related costs, household goods, living expenses, and limited site and landscape repair.
How to deal and address your loss with the insurance company and local authorities
After many years of dealing with property loss, these are the best applications to follow:
Contact your insurance agent
Contact your insurance carrier
Check for your policy. If you cannot find it, then request it from both your agent and the carrier.
Look to determine if your policy is a fixed total amount or is a full current cost to replace.
Do not talk to contractors just yet. The priority is to settle your claim first and foremost.
Find a design team: architect and engineer. Once you have them on board, you can then discuss with the carrier what your options are without having to go out of pocket.
Request that the carrier get you their cost to perform before you talk to any contractors.
If your policy is a fixed dollar amount, the carrier will just issue the check as a total to the policy. It will then be sent to you and your lender. Remember that if there is a lender, then they are in the driving seat. All funds must go to them and they have the right to withhold money to cover the loan first. Anything left over will go to you to allow you to do whatever you wish to.
If the policy is for the current cost to rebuild/replace, then you are in a better position to get your home back. These policies allow for a total replacement: like for like, prior to the loss. They typically cover for code upgrades, design costs, a longer ALE
(Additional Living Expense), and other costs associated with the policy in order to get your property back to normal.
Once the full design team is in place, you will then be able to get the required numbers to rebuild or repair. The carrier may not agree with your teams' numbers, but at least your numbers will represent what the design team can submit to the local authorities (Zoning, Building, HOA's).
You must remember this: this is not a simple path. The road will be long and hard in dealing with the carrier. They try to be reasonable and fair, but only to a point. You only get like for like, and you must focus on that first. What you decide to do after is another story. You must follow current building codes, current zoning codes. If your property is in the Costal Commission area, then you can rebuild timely if you do not increase floor plan area or height. If you choose to modify that, then you are considered a NEW application, and this could take you into a five-year process. The rules with any HOA are different and you must follow their guidelines. Manage your expectations: you will not get back into your home quickly. Currently, there is a labor shortage in the construction industry. We are and will be dealing with future material shortages. How long will it take to get your design team in place? How long will it take for the carrier to settle your claim? These are just the tip of this process.
You may hit the wall in dealing with the carrier. This does happen, and if it does, you must then make the decision on how best to move forward. You may have to hire a public adjuster or even an attorney to fight for you.
You will get through this, but it will take time.
Do not start construction until your claim is closed. Too many are in a rush, start reconstruction and then find out that they are going to be out of pocket for funds that they do not have, and not even their lender is willing to go out on a limb for them.