How to Replace a Destroyed House With Homeowner's Insurance Proceeds
If your home is ever destroyed by fire or some other catastrophe it's always a good idea to call your insurance company right away. The insurance company will be able to put things in motion to help you get your home restored or replaced. You have to follow the steps outlined by the insurance company to make sure everything is handled correctly. This will make sure there are no delays when it comes to processing your homeowner's insurance claim.
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Instructions
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Call your insurance company. When your home needs to be restored or rebuilt you should call your insurance company and file a claim. The representative on the phone will verify all of your personal information as well as the facts regarding your home. Insurance companies try to process these kinds of claims as quickly as possible to avoid prolonging the inconvenience. Policies usually cover your expenses to pay for your temporary lodging expenses--either to rent a similar home or pay a motel-hotel until the home is rebuilt. The amount covered can be for a period of time, like 12 months, or a percentage of the dwelling coverage of the home. If the percentage is 20 percent and your dwelling coverage is $250,000, your temporary lodging costs would be covered up to $50,000.
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Wait for the proceeds. Once your claim has been processed the insurance company will send you a check to pay to replace or rebuild your home. This represents the dwelling coverage for your property. You will need to find out the exact cost to replace your home. When you start the process of rebuilding you have to consider all of the costs involved. Deposit the check in your bank account. The contents of the home or your personal property are also covered under your policy, usually as a percent of the dwelling coverage, like 50 to 70 percent. For example, if the contents are covered at 50 percent of the house coverage, then a home insured for $250,000 will have the contents, such as furniture, appliances, and clothing, insured for $125,000.
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Contact a contractor. If you want to get the best possible service you should contact several contractors and see which offers the best service. This process should not be taken lightly especially since you are about to make a large cash expenditure. Compare their labor costs, material costs, and all other expenses involved. Check their references, and with the Better Business Bureau. If there are complaints against a contractor, usually the Better Business Bureau will have some record if they were reported. Don't do business with a contractor who has a large number of complaints.
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Choose a contractor from your list. Once you have done your research you will be able to make an appropriate choice. Find out from the contractor all of the details, such as when the construction will be completed. Make sure you are completely satisfied with your choice.
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Pay the contractor. Once your home has been completed to your satisfaction you can pay the contractor for the work done. Sometimes you have to pay contractors as they go. An upfront payment may be needed so the contractor can purchase materials. Prior to the final payment make sure a building inspector takes a look at your home to make sure there are no defects or code violations.
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Tips & Warnings
Make sure you consistently monitor the work being performed by the contractor. This will insure it meets your expectations.
If the insurance payout check is not enough to pay the cost of rebuilding the home you may have to scale back the size of your rebuilt home or borrow additional funds.
