Fire during remodel, not occupied

[Brandon_tn]

I am in Georgia. While in the process of removing the plaster and 2 old unusable fireplaces in a historic home there was a fire that caused extensive damage. The property was not occupied at the time due to the remodeling work. I have homeowners insurance but after the fire someone told me i should have had construction insurance instead of homeowners insurance. I am still waiting on a response from my insurance company.

My question is, can the insurance company deny the claim bc i was not occupying the home at the time of the fire or bc i should have had construction insurance?

Thanks for any info
B

 

[justalayman]

yes, they could deny the claim but depending on several variables such as; how long was the unit unoccupied; had you lived in it; were you returning after the remodel; what your policy states; and other items, the company could also cover the fire.


who was doing the work and do they have insurance?

 

[Brandon_tn]

Answers to posed questions:
how long was the unit unoccupied? a year and a half

had you lived in it? no, I bought it and started working on it.

were you returning after the remodel? yes, I have always planned on living there.

what your policy states: It is an HO-3 homeowners residential policy. I didnt see anything in it about construction or being vacant.

who was doing the work? Myself. Thats the reason its taking so long.

Additional info:
i always kept it locked, including gates to backyard, with lights on at night and a TV or radio playing on the inside. I told my agent to begin with that i would be doing some work on it for 2-3 months and she said ok. She didnt say anything about needing a different type of insurance if it was vacant or having work done to it.

Still waiting on a reply to the claim.

Thanks
B

 

[Banned_Princess]

Answers to posed questions:
how long was the unit unoccupied? a year and a half

had you lived in it? no, I bought it and started working on it.

were you returning after the remodel? yes, I have always planned on living there.

what your policy states: It is an HO-3 homeowners residential policy. I didnt see anything in it about construction or being vacant.

who was doing the work? Myself. Thats the reason its taking so long.


Thanks
B

Bad news for you...I don't think they are going to pay it. According to your post's this was not your home, it was always vacant, you were doing your own work, it had been empty since you bought it.

An HO 3 is a homeowner policy for people who live in their home.

What you needed was a vacant home under construction policy. it is very different, especially due to the fact it was vacant and its under construction. thats how you can tell what kind of policy you need.

Didn't you tell your agent what was going on in the house?

 

[justalayman]

Bad news for you...I don't think they are going to pay it. According to your post's this was not your home, it was always vacant, you were doing your own work, it had been empty since you bought it.

An HO 3 is a homeowner policy for people who live in their home.

What you needed was a vacant home under construction policy. it is very different, especially due to the fact it was vacant and its under construction. thats how you can tell what kind of policy you need.

Didn't you tell your agent what was going on in the house?

'nuff said.

 

[Brandon_tn]

Bad news for you...I don't think they are going to pay it. According to your post's this was not your home, it was always vacant, you were doing your own work, it had been empty since you bought it.

An HO 3 is a homeowner policy for people who live in their home.

What you needed was a vacant home under construction policy. it is very different, especially due to the fact it was vacant and its under construction. thats how you can tell what kind of policy you need.

Didn't you tell your agent what was going on in the house?

Yes, I did tell my agent i was going to be working in it. She asked me how long and I told her 2-3 months. She said ok and wrote up the policy. Nothing was said about needing a different type of insurance.

I dont see how a person who doesnt know different type of insurnace, other than Renter's Insurance, exists be expected to ask for it.

Nobody has asked how long it was vacant. Does the type of work being done make any difference or is it mainly that it was vacant that is the issue?

I have not really done any construction, only removing items: plaster, fireplace brick, kitchen cabinets (still in the house), trim work (still in the house), ceiling fans (still in the house), tongue and groove interior wood siding (still in the house), bathroom sink (still in the house). Tub and toilet still in place and working. Does any of this make a difference?

One more question: Since the adjuster said the damage exceeds the coverage, are they obligated to pay the mortgage company the loan balance even if they deny the claim?

 

[justalayman]

One more question: Since the adjuster said the damage exceeds the coverage, are they obligated to pay the mortgage company the loan balance even if they deny the claim?

at most they would ever have to pay is the policy limit and if they deny the claim, they do not pay anything, to anybody.

She asked me how long and I told her 2-3 months.

so, was the fire within that 2-3 months? Obviously not so. Basically, you were fraudulent in your actions to acquire insurance or you failed to update your situation when you became aware it was not going to be the way you said it was.

best of luck to you but from what I see, they have every right to deny this claim completely. If they pay, feel blessed and accept the lesson.

 

[justalayman]

Yes, I did tell my agent i was going to be working in it. She asked me how long and I told her 2-3 months. She said ok and wrote up the policy. Nothing was said about needing a different type of insurance.

I dont see how a person who doesnt know different type of insurnace, other than Renter's Insurance, exists be expected to ask for it.

Nobody has asked how long it was vacant. Does the type of work being done make any difference or is it mainly that it was vacant that is the issue?

I have not really done any construction, only removing items: plaster, fireplace brick, kitchen cabinets (still in the house), trim work (still in the house), ceiling fans (still in the house), tongue and groove interior wood siding (still in the house), bathroom sink (still in the house). Tub and toilet still in place and working. Does any of this make a difference?

One more question: Since the adjuster said the damage exceeds the coverage, are they obligated to pay the mortgage company the loan balance even if they deny the claim?

I have not really done any construction, only removing items: plaster, fireplace brick, kitchen cabinets (still in the house), trim work (still in the house), ceiling fans (still in the house), tongue and groove interior wood siding (still in the house), bathroom sink (still in the house). Tub and toilet still in place and working.

just how do you define "construction"?

it really doesn't matter because it is not so much the construction as the unoccupied situation that is the big problem.

 

[Banned_Princess]

I guess if he really wanted to bring up a mess, he could approach the agent, who OP claims to have told he was'nt moving into the house, that he would be working on it, about his E & O insurance for outright selling him a wrong policy. I mean it is what they are licensed for and what they are paid to do.

At very least I would give my agent hell over it, then I would drop him hard.

That is, if theres some way he can show the Agent knew what was going on with the house. The standard public really doesnt know the difference between policys.. they might not even know there are different policys. That is what the agents are for.

Like, maybe OP has insurance (with the agent) on the place his family was living in, in the meantime...
Well, I cant think of another way to show (not necessarly prove, but show) the agent knew he wasnt moving into the house, and it was going to be worked on. The agent had the duty to ask questions, and go over the insurance options with the client.

Well, food for thought really.

 

[justalayman]

I like how you think BP. There is a fiduciary responsibility between an agent and the client so I would think you could argue that point in court even.

But, the one problem is: the timeline the OP gave was not kept (in fact, over run by more than a year) and we do not necessarily have all of the facts. Exactly what was told the agent could be salvation or condemnation.

 

[Brandon_tn]

I guess if he really wanted to bring up a mess, he could approach the agent, who OP claims to have told he was'nt moving into the house, that he would be working on it, about his E & O insurance for outright selling him a wrong policy.

Hi BP, your profile wont allow private messages. wanted your input on the update to this post. see new post ..... "fire during remodel, unoccupied ... update"

you can change your prefferences to allow messages in your profile options, at least i believe thats the correct place.

thanks brandon

 

[ecmst12]

Don't start new threads about the same situation. Put your update in THIS thread where it belongs.

 

[Brandon_tn]

UPDATE:
The insur co is going to pay the full limit of liability BC their estimate is that the damage exceeds the coverage. The check is made out to me and the mortgage company for the full limit of liability as shown in the policy with nothing deducted for the $1000 deductable.

Q: Is there a reason they didn’t take out the deductable?

I was told the standard procedure is that the mort co takes their part out for the mortgage bal and then I get the rest. I called the Mortgage Company and told them I had the check from the insur co but I didn’t tell them it was a total loss claim. They explained that they would give me 1/3 of the amount of the check then when it was 50% completed by a contractor they would give me 1/2 of remaining amount and when 90% complete they will give me the remaining balance.

Q: When the mort co gets the adjuster's report explaining that his estimate is that the damage exceeds the coverage will they change this process and then take the mortgage bal and send me the rest leaving me with the land and burned home and no mortgage as mentioned above?
Q: In this situation does the homeowner have any choice of how it is paid?

The day before they called to say the check was ready I called and left a message asking about Debris removal coverage. The policy states that they will pay up to 5% over the limit of liability. They never mentioned anything about debris removal coverage and I don’t have an estimate on having the debris removed yet. (Getting one tomorrow)

Q: If they agree to pay for debris removal will they have to write a totally new check that includes debris removal amount? If so, is it likely they will take another month and a half to do it like it took to get the first check written?

Q: If I deposit this current check for the dwelling total limit of liability will I give up the right to file any other claims from this event?
(Note: the check doesn’t say anything on it about being the full payment for this event and I didn’t sign anything when I picked up the check)


Q: Does the insur co usually pay the estimated amount for debris removal or will they pay for it after it is actually done and I receive a bill for it?

Q: One more question: Should I just shut up, send the check to the mortgage co and count my blessings that the insur co paid anything at all?

I know this is a lot of info. Just trying to eliminate having to add it later bc i left something out.

Thanks so much for the replies,
Brandon

 

[C Rodriguez]

UPDATE:
The insur co is going to pay the full limit of liability BC their estimate is that the damage exceeds the coverage. The check is made out to me and the mortgage company for the full limit of liability as shown in the policy with nothing deducted for the $1000 deductable

.

good to hear, that was a very close one, I suggest a new agent.

Q: When the mort co gets the adjuster's report explaining that his estimate is that the damage exceeds the coverage will they change this process and then take the mortgage bal and send me the rest leaving me with the land and burned home and no mortgage as mentioned above?

I doubt it, the mortgage compant still wants to hold your mortgage, Its kinda what they do.

Q: In this situation does the homeowner have any choice of how it is paid?

What do you mean about that? you dont want to pay them and just fix the house? Did you tell the mortgage company thats what you want to do with it?

The day before they called to say the check was ready I called and left a message asking about Debris removal coverage. The policy states that they will pay up to 5% over the limit of liability. They never mentioned anything about debris removal coverage and I don’t have an estimate on having the debris removed yet. (Getting one tomorrow)

Q: If they agree to pay for debris removal will they have to write a totally new check that includes debris removal amount? If so, is it likely they will take another month and a half to do it like it took to get the first check written?

No, they will send you a new check.

Q: If I deposit this current check for the dwelling total limit of liability will I give up the right to file any other claims from this event?
(Note: the check doesn’t say anything on it about being the full payment for this event and I didn’t sign anything when I picked up the check)

No, you just wont get anymore then your policy allows. just because they send you a check, does not close the claim.

Q: Does the insur co usually pay the estimated amount for debris removal or will they pay for it after it is actually done and I receive a bill for it?

In your case I would pay for it, then send them the reciept, to pay up to 5%

Q: One more question: Should I just shut up, send the check to the mortgage co and count my blessings that the insur co paid anything at all?

You certainly should count those blessings, and get a new insurance agent.


Good luck with the house, maybe it will be ready to move into sooner then when you had the fire! lol

 

[ecmst12]

They didn't take out your deductible because the damage exceeded your coverage limit by more then the amount of your deductible. You are entitled to UP to the entire coverage amount that you purchased - your deductible is only subtracted if the claim is less then the coverage amount + 1000.

So how much is the check compared to how much you owe and compared to how much it will cost to repair?