Insurance covers tornadoes, but check policy

Leah Hinze, age 11, helped to cleanup her family's home, in the aftermath of the tornado which ripped apart Hugo, Mn.

[TiVo Girl]

"If a home is leveled, as is the case with several homes in Hugo, insurers generally will pay the full replacement cost — but only after the homeowner provides proof of the costs and that replacement did actually occur."

So, you've got little or no savings because your paychecks go to your mortgage and other expenses, and you weren't planning on moving anytime soon. Now you have to buy a house, but with no down payment, that ain't gonna happen, and the insurance company isn't going to reimburse you until you can prove you bought a replacement house? Um...doesn't that leave you homeless? Or forced to live in some godforsaken apartment with drunken 20-somethings and screaming kids running up and down the halls? Sure, then you might be able to save enough for a new house, but how long will the insurance company wait for you to come up with enough (20%) for a down payment? You may be saving some money, but it can still take years to come up with tens of thousands of dollars, especially since you'll need furniture in your apartment, which won't nearly be enough furniture or even the right furniture due to size restraints once you finally get your house.

Or, does this statement only mean they'll pay for your house up front, but you have to buy replacement furnishings first, then ask for reimbursement? Clarify the story, PP.

[Ex-Insurance Man]

TiVo Girl wrote:

"If a home is leveled, as is the case with several homes in Hugo, insurers generally will pay the full replacement cost — but only after the homeowner provides proof of the costs and that replacement did actually occur."
So, you've got little or no savings because your paychecks go to your mortgage and other expenses, and you weren't planning on moving anytime soon. Now you have to buy a house, but with no down payment, that ain't gonna happen, and the insurance company isn't going to reimburse you until you can prove you bought a replacement house? Um...doesn't that leave you homeless? Or forced to live in some godforsaken apartment with drunken 20-somethings and screaming kids running up and down the halls? Sure, then you might be able to save enough for a new house, but how long will the insurance company wait for you to come up with enough (20%) for a down payment? You may be saving some money, but it can still take years to come up with tens of thousands of dollars, especially since you'll need furniture in your apartment, which won't nearly be enough furniture or even the right furniture due to size restraints once you finally get your house.
Or, does this statement only mean they'll pay for your house up front, but you have to buy replacement furnishings first, then ask for reimbursement? Clarify the story, PP.

TiVo Girl:

What the plocy will state is two things. One is either called "Loss of use" or "Additional living expenses and loss of rent" - this part of the policy pays for you to either rent a house or an apartment while your house is being repaired/rebuilt, usually up to one year.

The second is the damage coverage, either called "Real property", "Residence" or "Dwelling". This is the amount paid to replace/repair your damaged home. With replacement coverage, they are requiring you to provide proof that the repair/replacement occurred; not that you just took the money without fixing anything.

Your agent can clarify this for you.

[tivo man]

Ex-Insurance Man wrote:

<quoted text>
TiVo Girl:
What the plocy will state is two things. One is either called "Loss of use" or "Additional living expenses and loss of rent" - this part of the policy pays for you to either rent a house or an apartment while your house is being repaired/rebuilt, usually up to one year.
The second is the damage coverage, either called "Real property", "Residence" or "Dwelling". This is the amount paid to replace/repair your damaged home. With replacement coverage, they are requiring you to provide proof that the repair/replacement occurred; not that you just took the money without fixing anything.
Your agent can clarify this for you.

dont worry ex-insurance agent man, tivo girl does not put any thought into what she writes on these forums.

[I agree]

tivo man wrote:

<quoted text>
dont worry ex-insurance agent man, tivo girl does not put any thought into what she writes on these forums.

This is true.

[Former DFLer]

When a home is first inspected they will issue the first check based on ACV or "actual cash value" this money is used generally as a downpayment to the contractor doing the work. The second check for replacement cost is issued upon completion and the contractor gets his final check. And Ex insurance agent man is correct. The loss of use provison pays for a place to live while their house is not livable.

[woodbury resident]

The insurance dept says: "It's a tornado," said Bill Walsh of the Minnesota Department of Commerce, which regulates the insurance industry. "It's covered."

Unfortunatly, it appears that hurricanes (a form of windstorm which are clearly covered) should be covered but the argument of the flood being the proximate cause of the damage seems be effective. Does anybody have clarification for this?

[Mark]

A hurricane is not just wind. It is also driving rain (water) and a storm surge (flood).
If a hurricane damaged home suffers damage from the wind (like a roof torn off) and then driving rain (wet contents from rain that came in the torn off roof), there is coverage under a standard homeowner's policy.
But if the home gets knocked off its foundation by a 8-foot storm surge and then is destroyed by the strong winds, then homeowner's insurance likely will not cover it because of the flood exclusion standard in nearly all homeowner's policies. People who like in areas likely hit by Hurricanes should buy flood insurance, which would cover damage from the scenario I laid out above.

[Realist]

I hope the people of Hugo don't say anything about water damage to the Insurance companies or the tightwads won't pay out anything. These companies will do anything and everything to cheat their customers out of being paid for their policy coverage. This is in the form of delays, low offers and challaging every claim. The CEO'S of these companies must be taking home a percentage of the saved money in their million dollar bonuses. Their actions are shameful!

[Sam]

Realist wrote:

I hope the people of Hugo don't say anything about water damage to the Insurance companies or the tightwads won't pay out anything. These companies will do anything and everything to cheat their customers out of being paid for their policy coverage. This is in the form of delays, low offers and challaging every claim. The CEO'S of these companies must be taking home a percentage of the saved money in their million dollar bonuses. Their actions are shameful!

The article is about checking your policy to see what you agreed to in your specific insurance contract. Why not let the dust settle and see what the outcome of the insurance claims are before spewing your anti-CEO crap.

[Realist]

Sam: How is the insurance claims busness these days. Can't take a little bit of truth evidently. I will predict a lot of these storm victims will be victimized by their insurance companies. I'm not anti-CEO or a Democratic voter. I'm sorry I don't fit the box you would like to have me in.