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My comment is off-topic, but I am unclear what insurance would pay in the case of a total loss of a home/neighborhood. For example, a small one bedroom home in
by throwaway657656 2y ago
My comment is off-topic, but I am unclear what insurance would pay in the case of a total loss of a home/neighborhood. For example, a small one bedroom home in the Pacific Palisades might have had a FMV of $2M. Let's assume the structure itself has a replacement value of $150k. On a typical policy, would insurance pay $2M in case of total loss, or $150k ? What if the neighborhood is destroyed and that land is now worth ~10% of what it was prior ? Would insurance then pay out closer to the $2M ?
- tptacek 2y agoHomeowners policies generally pay replacement cost, not market value.
- brewdad 2y agoInsurance is not going to cover the value of the land, except perhaps to the extent there are expenses related to making it suitable for rebuilding. If the land loses 90% of its value, that’s yours to absorb. I’m sure it is possible to get coverage that would help you in this case but that goes beyond a standard home insurance policy.
- exodust 2y ago> "total loss of a home/neighborhood" I don't think there's such thing as "total loss of neighborhood" in terms of home insurance. Your plumbing is still there. The land, streets & footpaths are still there; power can be restored to streets quickly, and a huge amount of employment and activity is generated in your devastated area. The missing part I'm unsure about is where people live while their house is rebuilt. In a trailer on the property might be an option if you can't afford to rent somewhere else during that time? Perhaps the state can waive rates, or some other benefit to allow fire victims to afford rent while they rebuild their homes.