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 Posted: Tue Apr 12, 2011 1:37 am Post subject: i have new tree house, but not in a good way |
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Tree fell on house this week in bad storms, not even a named storm - I feel so ripped off  ! Adjuster is coming back but already said detached garage is a total loss - coverage on 'other structures' is $38,500 and we have replacement value but like everyone else, only get the depreciated amount until he inspects the repairs.
My question is this: can I use the money towards that 2nd floor master bedroom we've always wanted while the roof on that 1/2 of the house is off anyway? Tree trunk fell on house and still awaiting total damages there, but garage is starting to look like a parallelogram just from the impact of the huge branches. When he comes to inspect the garage for our 2nd payment, can i say - look up there  ? We clearly don't use the garage for cars (it's got sound proofing, tv's, a bar, recliner and computer, rug, etc.).
Any advice? I know we'll still have to pay for the addition, but the repair money for the house and garage, combined with the ALE will make it cheaper for us to do it now rather than starting from scratch afterwards, plus I'll have no appetite for construction after this is over.
any advice is appreciated, thanks!
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treehouser
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| Posted: Tue Apr 12, 2011 1:46 am Post subject: |
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I'm not clear... you want to use the ACV money paid on the garage some place else? Yes, you can do this... as long as your lien holder is not on the check... which they probably will be if you have a lien. The lien holder won't sign off on the check until you show them proof that the damages have been repaired.
If you don't repair the garage then the insurance company won't pay RCV later on. |
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tcope
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| Posted: Tue Apr 12, 2011 6:27 pm Post subject: follow up |
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well... the garage is a total loss so we are not looking to repair it, we need to replace it. I am wondering if I can call it a media room instead of a garage, since that's what we use it for. Then I am wondering if we can replace it on top of the house instead of ground level using ACV, then when they come out and inspect it still get the recoverable depreciation. Does a garage have to be rebuilt on ground level if you don't' use it as a garage?
If it has to be on the ground, does it have to be detatched? There is room on the other side of the house to build a room the size of the garage - can I attach it to the house and provide heat/AC/plumbing on my own dime?
I am just trying to rebuild in a way that makes sense, the current configuration is from 1926 and doesn't fit in with today's lifestyles. Any advice is appreciated.
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treehouser
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| Posted: Wed Apr 13, 2011 10:39 am Post subject: |
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| I do empathize with you. You may change the current configuration if it dates back to the early 19th century. But regarding the garage, you must build it in a way so that it allows a smooth passage for your cars. |
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jeorge
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| Posted: Fri Apr 15, 2011 12:09 pm Post subject: |
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| Quote: | | I am wondering if I can call it a media room instead of a garage, since that's what we use it for. |
and | Quote: | | Does a garage have to be rebuilt on ground level if you don't' use it as a garage? |
Call it what you want, it's still a garage, as required by local building codes. Almost all municipal jurisdictions in the US require COVERED, OFF STREET parking on all residential building lots. As far as I know, garages and carports are usually built at street level, or subterranean, but that doesn't prevent you from building it ON TOP of the house, unless the local building code has something else to say about it.
As tcope has said, your lender may be in a position to dictate the repairs that are made, in order that you are not in default when it comes to your mortgage contract responsibilities.
The city is in control of how things get built. And, although common, "garage conversions" are usually unlawful, and this could be a problem when it comes to insurance. You could end up NOT being paid for the damage to an unlawfully used space. So I would counsel against calling anything other than a garage.
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MaxHerr
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| Posted: Fri Apr 15, 2011 2:53 pm Post subject: thanks |
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thanks for your advice. i think we are resigned to taking out a home equity loan for the new room/2nd floor and having to rebuild the garage to satisfy both insurance and mortgage inspections.
Unfortunately we won't even have the causualty adjuster's estimate until Monday at the earliest, to know what they will pay. There seems like alot of red tape, field manager vistits, additional approvals, etc.
Any advice on what to do next is appreciated - we have never done anything similar... just bought the house and moved in. No idea what we are doing, basically - 2 AM we were woken up with a big bang and the impact of the tree did not knock any knowledge of this stuff into our heads. I feel like I'm in one of those bad dreams where you have a test you didn't know about and you're in your underwear (if you're lucky).
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treehouser
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| Posted: Fri Apr 15, 2011 3:07 pm Post subject: |
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Because your insurance provides REPLACEMENT COST, then your initial offer will be the ACTUAL CASH VALUE of the damaged property, with the balance paid upon presentation of final invoices showing the total amount paid for reconstruction, less any deductible.
If your garage was "finished" on the inside (drywall, insulation, etc), the ACV/REPLACEMENT COST will allow for that to be replaced as well.
The point is this: many people suffer losses, tell the insurance company they will replace the damaged property, and then use the money for something else. To protect themselves, the insurance companies pay the minimum required if this was the known outcome, and willingly pay the difference when all is complete.
Your responsibility before you accept their offer is to know for certain what your loss is and to not accept any offer below that amount (deductible not withstanding). You may want to have two or three reputable local contractors provide you with estimates of the cost to repair/replace the damaged structures.
Contractors cannot charge you for that, and you certainly don't want to sign any contracts before you have completed your negotiations with the insurance company. If repairs are extensive, and you would prefer to be away from the property during construction (highly advisable!), then be sure that they include the "loss of use"/"additional living expenses" as separate line items in your settlement -- and be sure to get some or all of that extra money up front, too, to limit your out of pocket expense and then have to play catch up later.
Understand that the vast majority of insurance claims are settled fairly and amicably. If you don't believe the first offer is reasonable, continue to insist on a better resolution. I would avoid using the insurance company's "recommended" contractor in favor of using one of your own choosing -- too many opportunities for conflict of interest.
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MaxHerr
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| Posted: Fri Apr 15, 2011 4:00 pm Post subject: tx |
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Yes, we have 5 contractors perparing estimates. Since it is a catastrophe, the insurance company will not supply or recommend any contractors or other work people. This has caused tremendous stress and a burden on us - for instance we didn't now the tree people had to clear a 3' section on our neighbor's property because the garage is right on the property line, so now we have to hire them to come back out and we're already maxed out on haul-away. Our neighbor, who's tree it was, refuses to help and actually tried to convince us to include the cost of removing the tree off his property in our bill to the insurance company - can you even believe that?
Question - If we have the garage rebuilt first, will they come inspect it and give us the final payment or do we have to wait until the house is completely repaired?
Does anyone know - since it's going to be demolished, the city considers it a new building, and new buildings are required to be 3' from the property line - how can we do that, extend and curve our driveway around the back of our house to get a car in there? The driveway lines up to where the building is now, i can't just move it over 3' !
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treehouser
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| Posted: Fri Apr 15, 2011 4:07 pm Post subject: tx |
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Yes, we have 5 contractors perparing estimates. Since it is a catastrophe, the insurance company will not supply or recommend any contractors or other work people. This has caused tremendous stress and a burden on us - for instance we didn't now the tree people had to clear a 3' section on our neighbor's property because the garage is right on the property line, so now we have to hire them to come back out and we're already maxed out on haul-away. Our neighbor, who's tree it was, refuses to help and actually tried to convince us to include the cost of removing the tree off his property in our bill to the insurance company - can you even believe that?
Question - If we have the garage rebuilt first, will they come inspect it and give us the final payment or do we have to wait until the house is completely repaired?
Does anyone know - since it's going to be demolished, the city considers it a new building, and new buildings are required to be 3' from the property line - how can we do that, extend and curve our driveway around the back of our house to get a car in there? The driveway lines up to where the building is now, i can't just move it over 3' !
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treehouser
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| Posted: Sat Apr 16, 2011 10:42 pm Post subject: |
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Aside from the fact that the cost of all this damage may be the responsibility of your neighbor (if it is, your insurance company will subrogate the claim on your behalf, possibly even recovering your deductible for you, so you don't have to sue the jerk), knowing that the situation is complex, your insurance company will work with you, and release agreed upon sums incrementally, not delay until every last nail has been pounded.
The separate issue that you have concerning the property "set back" (3' from the property line) is governed under a part of your policy called "Ordinance or Law". Building codes change frequently (you may discover that you have to change wiring inside the home, for example, from 15 Amp outlets in the kitchen to 20 Amp outlets.
The replacement of property under different codes than when originally built may or may not be covered by your policy. If not, then you will be responsible for the cost of bringing the new construction "up to code".
If the driveway will no longer align with the garage door, you don't have to replace the entire driveway, but can widen the last 20 feet by the amount needed to maneuver your vehicles into the garage opening. So you might need to add about 60 square feet of driveway surface. Concrete to a depth of 4 inches would equal about 2.25 cubic yards. At a cost of $175-$200 per cu-ft installed, you'd only be looking at another $350-$450 (maybe even less). The insurance company might agree to chip in on that since a whole new footing and floor will have to be built for the garage itself, if it makes you a happy camper otherwise.
Or, maybe even easier, you can beat up on the contractors -- the guy who gets the job is the one who agrees to throw in that additional 2 yards of mud.
Think about this. Contractors have been starving for work for the last 2+ years. Who's going to lose an entire job over the cost of a couple of yards of mud and an extra hour or two of labor to form the silly thing? It's going to take at least two deliveries to pour the new footings and garage floor -- this way he might not have to pay for a short load. You might even get them to throw in another 2 yards for the 3x20 slab next to the garage (between the garage and property line -- city cannot stop you from doing that, as far as I know), and then you'll have a space tp park your motorcycle or lawnmower (or to stack the bricks you plan on throwing at your neighbor).
NEGOTIATE!! On this point, you have some measure of control! Use it to your best advantage.
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MaxHerr
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| Posted: Tue Apr 26, 2011 6:49 pm Post subject: update |
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We finally have the estimate from allstate, verbally at least, have to wait for the paper. our contractor agrees so far with the numbers. He talked to the city and they will let us rebuild the garage without moving it, but we can't make it bigger. I am giving serious thought to your idea of installing something hideous on my neighbor's side - perhaps a toddler's mural of the log pile that they once complained about before this all happened. Anyway, new question:
When we bought the house, the detatched garage was sold as-is, with the roof caved in and it was no usable. We used own money to fix it up. Allstate will write the check to both us and our mortgage company however. I don't think the mortgage company has any right to interfere and dole out our money in 3 increments after we jump through 4 hoops over 5 business days and bang our heads against the new wall 6 times, etc. - since we didn't borrow the price of the garage with the house. Any advice on getting either party to give in and cut the red tape associated with cashing the detatched structure check?
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treehouser
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| Posted: Wed Apr 27, 2011 3:26 am Post subject: |
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I think you are on unfirm ground on this one. If the garage was on the property when you bought it, in working order or not, it probably comprises some part of the "security" that the lender took to issue the mortgage, ready to fall down or not. The fact that you repaired with your own money not the lender's is probably immaterial at this point.
Who told you that the insurance money will be doled out in three increments? This is highly unusual. Unless the loss was a "total", the lender has no interest in the check, they simply need to sign it and forward it to you. Likewise, the insurance company is only permitted to withhold the excess over ACV until repairs are completed (at the latest). So from them you should not get more than two payments under most circumstances. (There could be language in your contract that contradicts this.)
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MaxHerr
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| Posted: Wed Apr 27, 2011 2:17 pm Post subject: more info |
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The lender is Wells Fargo Home Mortgage. They will forward us 1/3 after several business days of red tape once they get the check. I have to schedule their adjustor 2 weeks before the contractor is 50% done to arrive when he is 50% done, then they will start the process of giving me the next third of the check. When I schedule their inspector and he confirms the garage is repaired, they will give me the rest - which would include the 1/3 balance of the original Allstate ACV check plus any other checks Allstate issues me to recover depreciation (they don't care how much it costs, but we must prove beyond a resonable shadow of a doubt the garage was fixed before they will release money rightfully ours).
What's interesting is they call themselves the mortgage servicer, not the lien holder - they seem to recognize with the collapse of securitized mortgages, no one probably even knows who own the lien - they broke every mortgage down into so many pieces and sold them off so many times, they aren't even claiming to own the house, just claiming to perform feduciary duty on behalf of whoever does. Makes me mad.
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treehouser
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| Posted: Wed Apr 27, 2011 7:58 pm Post subject: |
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Well, well, WELLS! They hide behind their Federal Regulator, the Comptroller of the Currency, to get out from under every state's banking and insurance regulations, knowing that the federal regulator performs almost no regulation. It's been upheld more than once in federal court, and it's obscene. Rat bas****s.
Sorry to hear that. You can try complaining to the Dept of Insurance, but it probably won't help.
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MaxHerr
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| Posted: Tue May 03, 2011 5:01 pm Post subject: hows this |
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How is this for the start of my crusade against this unfair practice? I know people here defend this practice but they have never been in my shoes. It just places too much of a burden on someone in their time of need and seems cruel and unnecessary. Just because it's industry practice does not mean the industry can't be wrong - just ask the millions affected by the financial crisis. This is what I have come up with:
Wells Fargo and the mortgage industry as a whole have gone too far in attempts to avoid negative outcomes. The illegal and irresponsible behavior of the minority of customers has catalyzed WF into creating a burdensome process that bestows unnecessary hardship on ALL of it’s customers.
Considering Wells Fargo follows 'KNOW YOUR CUSTOMER' - SECTION 326 OF THE USA PATRIOT ACT, this should not be necessary. The Federal Reserve states:
- One of the most important, if not the most important, means by which financial institutions can hope to avoid criminal exposure to the institution by ‘‘customers’’ who use the resources of the institution for illicit purposes is to have a clear and concise understanding of the customers’ practices. The adoption of 'know your customer' guidelines or procedures by financial institutions has proven extremely effective in detecting suspicious activity by 'customers' of the institution in a timely manner.
LOAN TRANSACTIONS
It is important to realize that relationships with a financial institution that take a form other than deposit accounts can be used for illicit purposes. Loan transactions have become a common vehicle for criminal enterprises that wish to take advantage of the proceeds of their illegal activities. Therefore, prudent financial institutions should apply their 'know your customer' policy to customers.
For example, if Wells Fargo knows me as a customer, they would know:
- I have $130,000+ equity in my home
- I have a job
- I pay ALL my bills on time, including the mortgage
- I contribute extra money to the principal on my mortgage each year
- I have a nest egg larger than the insurance check.
The conclusion you can draw from the above knowledge is that:
- I am not going to abscond with a $50K insurance check and stop paying my mortgage.
- This would not be considered enough of a windfall to start engaging in fraudulent and illegal activities.
I don't need to be treated like a small child and given an allowance by my mortgage company. What do they want to know next, how many squares of toilet paper everyone in the house uses?
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