property destroyed by fire.

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dewdrop

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if a person had the unfortunate experience of their property completely destroyed by fire can they, subject to usual investigations, just retain the fire insurance pay out rather then rebuild. I appreciate if the property was mortgaged the cheque would be issued in joint names
 
I hope your not planning anything.

I'd assume the property damage would be assesed by insurance company.

Lets say value of property on open market it €400,000.

If that property was completly burt to ground and was assesed as being an accident the insurance company will issue the rebuilding cost.

The rebuilding cost may only be €200,000. They will take it the site was worth the other €200,000.

So if the person took the insurance cheque they would still have a site to sell.

And no doubt the bank would have issues with this.
 
Unlike, they like indemnity in these cases as opposed to cash-in-lieu of repairs! As per Vinnie, I would say the bank would insist on it. Though you never know in the current climate.
 
A lot of fires at expensive buildings recently, aren't there dewdrop? ;)

Mrs.YM was just commenting the owners should be more careful...
 
Mine was just an innocent question..merely to know whether one had to use the funds to rebuild.
 
dewdrop said:
Mine was just an innocent question..merely to know whether one had to use the funds to rebuild.
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I have heard stories about insurance companies looking for receipts before releasing further tranches of cash on a rebuild following a fire, but I don't know if they are just stories.
 
Anytime we have had clients in this situation, the insurance company usually put the rebuild to tendor and then go for the lowest bid from a reputible builder. They usually have the right to do this in their t&c's. I would think in the current environment they may be even more inclined to do this. I have heard that a lot of independent assessors working on behalf of the client have been able to optain a chq from the company (I would think this is to facilitate them getting paid, thats not to say the assessor is not worth paying for, they usually are in a big claim), but don't think this is a certainty.
 
Jimbobp said:
Anytime we have had clients in this situation, the insurance company usually put the rebuild to tendor and then go for the lowest bid from a reputible builder. They usually have the right to do this in their t&c's. I would think in the current environment they may be even more inclined to do this. I have heard that a lot of independent assessors working on behalf of the client have been able to optain a chq from the company (I would think this is to facilitate them getting paid, thats not to say the assessor is not worth paying for, they usually are in a big claim), but don't think this is a certainty.
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As a Loss Assessor I can advise that I would calculate the cost of rebuild and use that as the basis to obtain settlement and I try to avoid the panel of builders that the Insurer has put together as it has been my experience that the quality of work from some of the panel builder let alone the scope of works leaves a lot to be desired.
Generally in a total loss payments will be made on a staged basis with 1/3 being paid upfront a further 1/3 midway through and the final payment is made when all works are completed and the final accounts are submitted.The works will be inspected on a ongoing basis.
If you just wanted to take the money and not rebuild at all you would not get the full cost of rebuilding and the settlement would be a lot lower.
 
Hi Ed054, thanks for that. In the event that there is a mortgage on the property, would the payments go through the bank or would they go directly to the householder?
 
in short from someone in the industry once there is no mortgage you can do what ever you like with the money. The legal requirement the insurance company has is to agree a satisfactory settlement with the policy holder based on the terms on the insurance. It does not state anywhere that the house must be rebuilt. The insurance policy is all based on values.

Where there is a mortgage the mortgage company have a say and will probably force you to rebuild or at least pay them the balance on your mortgage as their security on the property is worth far less if there is no house on the site
 
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