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I could be mistaken on this, as I don't live in an area where such things are common, but my understanding is the issue is that if your house is destroyed by sa
by ouEight12 3y ago
I could be mistaken on this, as I don't live in an area where such things are common, but my understanding is the issue is that if your house is destroyed by say, a hurricane, no insurance provider (or fema) gives you a bag of cash and says "move", reimbursement is predicated on rebuilding the structure where it stood.
- slavboj 3y agoInsurance makes you whole, not the property. You are perfectly welcome to pocket the cash. Although if you have a mortgage, you do have an additional obligation to maintain the value of their collateral or pay off the loan.
- phonon 3y agoIf you have replacement cost coverage (as opposed to actual cash value (=depreciated value) you typically have to use it to reconstruct the home if you want the full amount. This is typical. "We will pay no more than the actual cash value of the damage until actual repair or replacement is complete." [0] [0] https://www.iii.org/sites/default/files/docs/pdf/HO3_sample.pdf https://www.iii.org/sites/default/files/docs/pdf/HO3_sample....
- whimsicalism 3y agoTerrible idea, so glad the government structured NFIP this way.
- lokar 3y agoAnd a rational insurance program would not keep insuring the same property over and over as it gets destroyed.