Fire damage to home and Insurance claim issue

I recently had a house fire. I have two mortgages on my home. Our insurance company is covering the damages but told us that "they will not cover the living expenses for time that it takes to get both mortgage companies to endorse the checks". My problem is, is that our mortgage companies both told us that it will take time to endorse and get the funds to us for the repairs. Its already been two weeks and the first mortgage company hasn't even endorsed the check yet. Once they endorse the check they have to forward it to the other mortgage company. Who knows how long that will take. Can the insurer really not cover our living expenses for that time that it takes to get the funds for repairs??

Chris

Hoddy1:

Can the insurer really not cover our living expenses for that time that it takes to get the funds for repairs??

Yes.

Read your policy. See Coverage D - Loss of Use.

• Additional Living Expense
• If a loss covered under Section I makes that part of the "residence premises" where you reside not fit to live in, we cover any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living.
• Payment will be for the shortest time required to repair or replace the damage or, if you permanently relocate, the shortest time required for your household to settle elsewhere.

(Emphasis mine)

You have the option of starting the repairs without waiting for the mortgage companies to endorse the checks.

Many contractors who do insurance work are used to the mortgage company issue and are likely to start work with a partial payment. 

"Payment will be for the shortest time required to repair or replace the damage"

Jack, What is "shortest time required" though? Wouldn't that include the time it takes the mortgage companies to get us the funds to start the repairs? If not why wouldn't it? It is time out of our control and is a result due to a fire. So my family can be homeless because a mortgage company needs time to endorse a check? I mean they(mortgage companies) have their policies for incoming insurance claim checks. The mortgage company is NOT going to immedietly get the check, rush to endorse it and get it back to you the same day. So that time should be covered as a part of the time to repair the home, am I right??

Hoddy1:

Jack, What is "shortest time required" though? Wouldn't that include the time it takes the mortgage companies to get us the funds to start the repairs?

No. The delay in the mortage companies endorsing the check is not the the insurance company's problem. It's yours if your policy reads like Jack's example. The policy says "shortest time to repair" and the shortest time is having the construction crews start immediately and do the work promptly. The insurance company understandably doesn't want to pay more because other people (like lenders) are slow in doing stuff. So, the onus falls on you to either (1) find a way to get the lenders to speed things up or (2) find some way to get some funds (e.g. borrow or whatever) to at least get the work started if you want to minimize your out-of-pocket living costs here.

Hoddy1:

The mortgage company is NOT going to immedietly get the check, rush to endorse it and get it back to you the same day.

It COULD do that if it wanted. But it has no reason to expedite it and instead will subject it to the usual lender bureaucracy for this stuff unless you can motivate them to speed things up.

Hoddy1:

"Payment will be for the shortest time required to repair or replace the damage"

Jack, What is "shortest time required" though? Wouldn't that include the time it takes the mortgage companies to get us the funds to start the repairs?

No.

You are imagining something in that provision that doesn't exist.

The shortest time to repair or replace has (as Taxagent explained) nothing to do with when you get the money from the mortage company.

And I'll take it a step further.

If you had (or got) the money and decided to do it yourself but could only work on the project evenings and weekends and it took you six months while you were living in a hotel, the insurance company would not pay the living expenses for the six months but would only pay for the time it should have taken a professional contractor to do the work which would only be a fraction of that six months.

Hoddy1:

So my family can be homeless

That's your choice. There are plenty of ways not to be homeless.

Taxagent- The delay in the mortgage company endorsing the check is not the insurance companys problem????  Really? Neither was the fire or neither was the damage if you want to go that way. They should just write the checks to the insured then and not the mortgage companies. If they are going to put the mortgage company on the check then they should be responsible for the time it takes to endorse it. I chose that insurer and also pay the premiums. Why do they need to write it to the mortgage company??? As far as i'm concerned they are responsible!!

Jack. I'm imagining something that that doesn't exist?? LOL I noticed you are an adjuster. I'm guessing you might be a little biased towards the insurers? Just as I told Taxagent why didn't they just write the check to me? I pay the premium not the mortgage company!

I don't plan on doing the repairs myself. I have a Restore company doing all the work. So that theory is out the window. Even my Restore guy said that the insurer couldn't deny me expenses for the time that it takes to endorse he check. What does taking me 6 months have to do the work have to do with the mortgage company taking their time to endorse a check???? The insurer should know as soon as the check has been deposited so that's when payment for the living expenses should end. Not when they send it to me!

Can you EXPLAIN to me how a family of 5 can find ways to NOT be homeless?????????

INSURANCE COMPANYS ARE THEIVES!!

Hoddy1:

Jack. I'm imagining something that that doesn't exist?? LOL I noticed you are an adjuster. I'm guessing you might be a little biased towards the insurers?

Sigh.

I get that a lot.

But nothing's further from the truth. You need only read my thousands of discussions about insurance to realize that I have no bias in favor of insurance companies. More often than not I side with posters and provide inside information on how things work.

Hoddy1:

why didn't they just write the check to me?

Because your mortgage companies are listed on your policy as mortgagees. Here's the Mortgage Clause:

• If a mortgagee is named in this policy, any loss payable under Coverage A or B will be paid to the mortgagee and you, as interests appear. If more than one mortgagee is named, the order of payment will be the same as the order of precedence of the mortgages.

Hoddy1:

I pay the premium

Yes, you pay the premium on a policy with terms and conditions that you are bound by.

You do realize, don't you, that the provisions I am quoting are from a sample standard homeowners policy and the wording should be almost identical to the wording of your own policy, should you care to read it.

Now, I've told you what's in your policy. That's the end of my contribution to this discussion.

You are welcome to hire an attorney if you want to do battle with your insurance company.

Hoddy1:

Taxagent- The delay in the mortgage company endorsing the check is not the insurance companys problem????  Really? Neither was the fire or neither was the damage if you want to go that way.

No. You missed the point. The fire damage is the insurance company's problem because it undertook to pay for that in the policy. It did not undertake to pay for the mortgage company delay in endorsing the check. It is because that delay is not covered in the contract that it is not the insurance company's problem. Like it or not, the insurance company is only obligated to pay for what the insurance contract says it must pay.

Hoddy1:

They should just write the checks to the insured then and not the mortgage companies....Why do they need to write it to the mortgage company???

The typical insurance company contract specifically says that the check will be made out to both you and the mortgagee(s). Why? Because the mortgage that you gave the lender as part of your loan agreement is a lien on the home. If the insurance company paid you directly and didn't also include the mortgagees, it runs the risk that the lender will claim that the insurance funds should have gone to it because of the lien interest it holds. The insurance company doesn't want to get into the expense of fighting those battles, even if they might win them. It's simply more cost effective to avoid that risk and include the provision that the mortgagees will be a joint payee of the check.

Hoddy1:

If they are going to put the mortgage company on the check then they should be responsible for the time it takes to endorse it.

I understand your viewpoint that the insurance company SHOULD have to pay for it. But one of the common mistakes I see by people asking questions on these boards or when they consult me in my office is that they get it stuck in their head that because they believe something should work the way they want it to work that it in fact does work that way. It appears you may be falling into that same trap. Regardless of how you think it should work, all the insurance company must pay is what the contract says it must pay. The insurance company contracts do not say they pay for living expenses for any delay period that comes about from the lenders' process in indorsing the check. The contracts are generally carefully worded to cover living expenses for just the time it should take the construction crew to do the job once it begins work. Since that is all the insurance company contract says it will pay for, that's all you get. An insurance company could put that in its coverage if it wanted, of course, but then it would end charging a little more in premiums to cover it.

.

Taxagent,

It does NOT state in the policy that it will or will not cover the time it takes for the mortgage company to endorse the checks. So how can they deny that? Shouldn't it state in the policy that they "will not cover extra time to endorse checks"??? I also spoke to two local insurance attorneys and both said it wasn't worth hiring an attorney over, but that NO the insurer DOES have to cover that time that it takes to endorse. Both attorneys said that the insurance companies will try to pull that over me but if I am adamant enough about it, that they will have to pay. Also my Restore company told me also that they have to cover that. My Restore guy has been in the business over 20 years and said "NO WAY" can they deny that. He is even vowing to help me fight them over it. And he is not with some fly by night restore company either. They are one of the largest and oldest restore companies in the country!

I'm still waiting on Jack to explain to me where a family of 5 is supposed to go once our living expenses runs out??

"I'm still waiting on Jack to explain to me where a family of 5 is supposed to go once our living expenses runs out??" 

I wouldn't hold my breath on that one. Seems you've already burned that bridge in your first response to Jack.

Too bad for you though, cuz if there was a way to convince the insurance company to pay for those expenses, he would have been the one that could have showed you how to make it happen.

dennis_nj:

"I'm still waiting on Jack to explain to me where a family of 5 is supposed to go once our living expenses runs out??" 

I wouldn't hold my breath on that one. Seems you've already burned that bridge in your first response to Jack.

Too bad for you though, cuz if there was a way to convince the insurance company to pay for those expenses, he would have been the one that could have showed you how to make it happen.

 

Burned my bridge? You mean by asking him if he was maybe biased towards the insurance companies? It's a fair question am I wrong?

One way or another though... I will WIN. It may or may not be through that part of the policy but I will win in the end......  With Jacks help or not!!

Just got of the phone with the Texas Department of Insurance and they ALSO told me no way thats possible and that the insurer "is responsible" for the time it takes to endorse. So..... They told me to make a complaint in writing to them and the will immedietly take action against the insurer and fight on my behalf!!  WINNING!!!!

Hoddy1:

Texas Department of Insurance

A fairly toothless organization as far as making an insurance company do anything.  What they can do is penalize a company if they don't follow the rules.  If your company is "following the rules", and it sounds like they are, they might get a slap on the wrist because of your complaint. 

Have you made any effort to light a fire under the moirtgage company(s) by explaining your financial situation?  Have you worked your way up the chain until you got their attention or what? 

Hoddy1:

They told me to make a complaint in writing to them and the will immedietly take action against the insurer and fight on my behalf!!  WINNING!!!!

Don't count your chickens too soon.  Your policy is a contract with the insurance company.  As long as they are living up to the terms of the contract they really don't have to worry.

Good luck 

Hoddy1:

It does NOT state in the policy that it will or will not cover the time it takes for the mortgage company to endorse the checks. So how can they deny that?

Unless there is something in the policy that says the insurance company pays for it, it is not obligated to pay for it. That's the bottom line.

Hoddy1:

Shouldn't it state in the policy that they "will not cover extra time to endorse checks"???

No. There needs to be something in the contract that say it will cover it for the insurance company to be obligated to pay for it.

Hoddy1:

Both attorneys said that the insurance companies will try to pull that over me but if I am adamant enough about it, that they will have to pay.

Great. Did they read your actual policy before they said that? If not, I'd not put much stock in that. I'm not saying that YOUR insurance company isn't obligated to pay for it since I've not read your specific contract. All I'm telling you is that every insurance contract I've seen doesn't cover it. So, if your policy is like the others I've seen, you're out-of-luck. But, your policy may be different. If you want to fight it out with the insurance company, you need to read your specific policy and quote to the insurance company exactly where it says this is covered. Insurance company lawyers go by the specific wording of the contract, and that's what you'll need to do too if you want to convince the insurer to pay for it.

Hoddy1:

My Restore guy has been in the business over 20 years and said "NO WAY" can they deny that. He is even vowing to help me fight them over it.

Lots of people who aren't lawyers are convinced of things about the law that aren't true. That includes people working for big companies. Don't trust any specific advice on what your insurance company is obligated to do that doesn't come from a lawyer who has read your particular insurance contract.

Your restore guy cannot give you legal advice or represent you because that is the unauthorized practice of law, which is illegal.

Hoddy1:

I'm still waiting on Jack to explain to me where a family of 5 is supposed to go once our living expenses runs out??

Well, that's not really relevant to whether the insurance company must pay for it. The insurance company's obligations are defined in the contract. The obligation does not turn on whether you have the money to pay the expenses yourself. If you don't have savings, investments, a credit line, or some other way to raise funds for emergencies like this, then you'd need to either rely on family help, church assistance, public assistance, or whatever else is available to you to meet your living expenses.