fire insurance

[frogsrfine]

What is the name of your state (only U.S. law)? Alaska

How can an Insurance company refuse to insure you for less than a certain amount, even though it excedes the cost of your mortgage, then when you have a total loss a year later, say that your home was worth aproximately 50,000. less? And that's all they'll pay. period.

 

[ecmst12]

They don't ever have to pay more then a total loss is worth. And with the way the housing market is dropping, it could have lost $50k in value in less then a year, easily.

 

[moburkes]

What is the name of your state (only U.S. law)? Alaska

How can an Insurance company refuse to insure you for less than a certain amount, even though it excedes the cost of your mortgage, then when you have a total loss a year later, say that your home was worth aproximately 50,000. less? And that's all they'll pay. period.

they don't pay you what the home is worth. You'll need to provide more details. The ONLY time that the market value comes in to play is at the time of the purchase. At that time you MUST insure your home (I'm assuming a standard insurance company) for 100% of the replacement cost. So, while the market value of your home may be shrinking, the cost for labor and materials to rebuild your home isn't. Also, it costs about 30% more to rebuild your home than it costs to build it. AND, if your market value is not "in line" with the replacement cost, then you might not be able to get a policy for the replacement cost in the first place.

Having said that, you'll need to provide more details on the type of policy you purchased and the incident which happened which caused your house to burn. But, if you only had a true fire policy (a dwelling fire policy, not a home policy), then that is something different, too.