In Alabama, if your home is declared a total loss, the insurance proceeds are generally used to rebuild your home. Alabama, unlike many states, does not have a value policy law. With a value policy law, the amount of the damages is clear – it’s the amount set forth in the insurance policy. Without a value policy law, the damages for a total loss require the skills of an experienced Alabama home insurance lawyer. The attorney works to obtain the highest value possible according to the terms of insurance policy and current Alabama law.
When homes are declared a total loss without a value added policy, the standard procedure is for the homeowner to work with the insurance company in selecting contractors to rebuild the home. The proceeds are typically paid out in installments. The insurance policy should ideally include payment for alternative living arrangements until the home is rebuilt.
Normally, if your home is damaged due a fire, tornado, hurricane, or natural disaster; the insurance company is obligated to pay for the cost to make the necessary repairs, up to the policy limits. If your home is a “total loss,” that essentially means, in Alabama, that your home needs to be rebuilt from scratch. Generally, if the costs to repair the home are more than or even 80% than the value of the home, the damage is considered a total loss or when the home is damaged beyond its useful purpose. If the coverage isn’t enough, then you need to pay the excess costs from your own funds. If the coverage is more than the cost to rebuild, you are paid for the cost to rebuild and not the full policy limits.
Total loss damages are based on either the replacement value of the home or the actual cash value of the home. The difference between the two is that depreciation (the wear and tear and age of the home) is deducted when an actual cash value is used, but not when replacement value is used. Both replacement value and actual cash value determinations usually depend on the assessments of qualified real estate appraisers.
When homes are a total loss, many homeowners will want to rebuild their homes. Homeowners are not required to rebuild though. They can also take the value of the home and buy another home elsewhere or even keep the money and rent an apartment.
At Warhurst Law, attorney Gene Warhurst is more than just a seasoned insurance attorney. He is highly acclaimed and honored for his prior work as an insurance adjuster. When fires, hurricanes, and other disasters strike; he’ll guide you through the insurance claim process. He’ll fight to help you get the funds you need for repairs or the funds you need to start over. For immediate help, call the Alabama total loss insurance lawyers at Warhurst Law at 251-207-1296 or complete our contact form to schedule an appointment. We represent clients across Alabama and the Southeast, including the Gulf Coast and the Florida panhandle. We meet clients in Mobile, Alabama and also arrange to visit their homes and buildings.
* Warhurst Law cannot and does not guarantee an outcome to any case.