I may have a total loss of my house due to sinkholes. My dwelling policy is worth $190,000 for 2009 to 2010. Last year my dwelling value was $210,000.00. My mortgage loan has a balance of $50,000. How will I know how much coverage I will get out of my policy?
The easiest way to find out how much your policy will pay out in the event of the total destruction of your property is to call your insurance agent and ask them what the policy will pay if your home is destroyed. If you have a policy with a maximum coverage of $190k, and the home is worth $210k, my best guess would be that you would be paid the entire $190k if the property is a total loss. However, there are some policies that only pay enough to cover outstanding encumbrances on the property (mortgages, tax liens, etc.), and do not pay you the difference if your home is worth more than what is owed. You need to carefully review your policy agreement and then contact your agent to explain the situation and find out what the policy is likely to pay.
If you do not think that the brokers answer is in line with the terms of the policy contract, then you may want to retain an insurance attorney to review the contract and make sure that you are not being misled about your rights under the policy. Also, if the home is destroyed and you are forced to make a claim, your attorney can make sure that you are paid the entire amount that you are due.
Given the amount of money at stake in this situation, it is probably a good idea to speak with an attorney anyway, just to make sure that you fully understand your rights, obligations, and responsibilities, which will hopefully prevent any potential problems with the insurance company down the road. For a referral to an experienced attorney, you can contact your local or state Bar Association's attorney referral service; you should be able to find your local Bar Association's contact information online.
I certainly hope that you are able to save your home; however, if you are forced to file a claim under this policy, it is best to be prepared and to have all of the information you need available to you. I wish you the best of luck and hope that the information I have provided helps you make better money decisions.