Hartford AARP Home Insurance - If you can't rebuild - does the policy pay anything ?

[KealoloSW]

Has anyone with an AARP Hartford Home Insurance policy had their home totally destroyed and not been able to rebuild? I'd really like to hear from you. We have an AARP Hartford Home insurance policy  that has "100% Estimated Replacement" but it does not say if the policy will pay anything if the home is demolished and we cannot rebuild. We are in Hawaii and  have the supplemental hurricane policy but if we were not able to rebuild due to supply chain issues which could last years  if a hurricane hit Oahu, we would need to move. The Hartford Customer Service agent I talked to today said the policy would pay out but that that is not stated in the policy and that he COULD NOT send me anything in writing. Not happy.   Years ago an agent told me they do settle but at Actual Cost Value.  This agent today told me "No- we don't do Actual Cash Value"  Anyone have experience with turning in a claim when you could NOT rebuild ? Did you get a settlement? And how did they calculate it?  Anyone know how I can get answers in writing? This agent on the phone was adamant that I could not talk to Claims until I had a claim to file ( I figured they would know) and that he could not send me anything in writing. I don't want to change companies (Hartford is one of the few with hurricane policies) but ... I look forward to hearing from you  Sue (suenewsandread@gmail.com) 

[GailL1]

Remember that your insurance also covers the demolition of the part still standing to prepare for a rebuild.  You probably also have an amount that is included that pays some of your lodging expenses during a rebuild. Then there is your deductible which is the part you pay and have chosen.  So there are lots of coverage in the policy that isn’t just straight for a rebuild.

Why would you not want to rebuild?  People  build back after a disaster.  That’s the purpose of the insurance.  

If you want your question answered legally & formally in writing, take your policy to a lawyer and have them interpret it for you and then you not only have it in writing but a source in case something like this ever happened and you need representation.

[IndyMo]

It's a little thing called AGE, Gail. If you were in your llate 60's or older, and in poor health, you wouldn't want to wait on rebuilding either! Have a little empathy, willya 

[GailL1]

Since the OP did not say, I was just asking the why question.  So this has nothing to do with empathy - just process and contracts.  MAYBE it can be done but the how much is gonna be an answer that the insurance agent (or lawyer) will have to give because there is a lot more in the policy than just the rebuild cost - I mentioned some of them.  

Insurance is there to make one whole after a claim, less the deductible.  Logic says, the owner would want to sell it for their own finances and their estate but to do that, it has to be rebuilt.  If there is a mortgage on the place, that has to be settled if they want to walk away from it.  

This would take professional help - insurance agent or lawyer or both to see if it was even feasible number-wise.  

I would think if your reasoning might be involved that the person would just go ahead and sell it before any disaster happened.  

[TRL1111]

---

@GailL1 wrote:

Since the OP did not say, I was just asking the why question. 

---

I think the person you're responding to and the OP might be the same person.  Different screen name but same avatar.  I've noticed this with a poster in Virginia who keeps changing her screen name and I'm not sure if the comments track that.  This is not the most sophisticated forum ever invented.

The OP mentioned supply chain issues that could drag out things for years.  That tracks with this new person talking about waiting on rebuilding.  In which case the "have a little empathy" is a bit ironic, because there's no way to know if the OP and this person are the same.

Anyway, what occurred to me is if you look at what's going on in the Outer Banks of North Carolina, and in mountainous wildfire regions, and in hurricane zones, there are lots of very good reasons not to rebuild your house if it gets destroyed by nature.  

[GailL1]

@TRL1111 

Maybe - who knows who post here especially those that keep changing their AARP online identity.

I have done a bit more research on this and it seem there are several things that have to be considered.  

(1) state law - many times it will mandate that an insurer have a right to a pay out amount if the homeowner decides not to rebuild.  This amount would be based on the type of policy the homeowner has in place - guaranteed replacement value, special peril insurance required in certain areas or states, Basic form, Broad form, Special Form, Comprehensive Form & Modified Coverage Form - the non-build payout would be a certain % of the rebuild amount based on the type of policy - I read that this could be a reduced amount equal to 20% - 50% of the insured value.  Then there are types of dwelling coverage that has to be also considered - like a condo where the owners insurance covers the interior structure and the exterior is covered all the owner’s coverage - they maybe able to force one to complete the inside if they are covering the outside rebuid.

(2)  even if a state law does not have these specifics in place, many policies will actually state what the non-rebuild payout would be in the policy.  

Then there is the land price, which is not covered in the homeowners insurance - so that could be sold separately by the owner.  

Like I said, a policy has more covered in it than just construction - things link demolition, cost of permits, bringing items up to code , then there are things like personal property that are usually a set amount or a % of the insured amount or things like outside structures have a separate amount.  That would be part of figuring out what the non-build payout would be.  

The mortgage needs to be covered in full and usually they are named as the 1st holder on the policy - but it seems that sometimes this can also be overlooked and the owner can default on it and take the money and run - but with a huge hit on their credit worthiness.  

Again, if this is what the homeowner may want to consider, they need to talk to their insurance agent about it or decipher their current policy to see what is within the current policy for this type of event. Perhaps know what their state law says about it - 

Personally, if this is a great concern, they may need to find a policy that has this built in so that they know their risk before the peril occurs.

Seems like a very complicated problem but not one that cannot be overcome but whether that is to the homeowners liking is another concern.