by alknasel » Mon Sep 06, 2010 04:29 pm
fire was at 2nd home, it is on Fox Lake Il . FEMA rules of over 50% damage, house must be demolished and rebuilt to new codes. Because of poor soil house will need to be built on pilons. Insurance will not pay for most of the extra things I need to do so I really need the replacement cost part of the claim and can't buy the new furnishings until we rebuild, so we will ioose the replacement part of the claim also.
Posted: Tue Sep 07, 2010 05:17 am Post Subject:
Doesn't sound like your homeowner's policy was up to snuff -- does not include building code upgrade coverage, is undervalued, or both.
If you have a lender, and you choose to walk away, the lender will receive the replacement value of the property up to what you owe, and if there is any overage, it will go to you. If there is a shortfall, you'll still owe that to the lender. They would likely forgive the balance, depending on the amount, especially if you are paying for PMI, but you would have an income tax liability on the forgiven amount.
Did you purchase your homeowner's policy though an agent or on your own. If through an agent, you might have an Errors & Omissions claim against him for not explaining the need for (or offering) appropriate coverage for your property's location . . . if that was the case. If you were explained the various options, and chose to ignore them, well . . .
Add your comment