How and when do we access "replacement cost" funds on our policy? How do we get access to Loss of Use?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Dec 5, 2018

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Insurance Question from Magalia, CA

Asked on 12/05/2018

How and when do we access "replacement cost" funds on our policy? How do we get access to Loss of Use? Can we "cash out" on replacement costs and Loss of use funds? We are thinking of rebuilding in another location so we want to maximize funds asap nd be done with insurance claim. We have CSAA insurance.

Answer given on December 08, 2018

Presuming your home is a total loss, you can ask the insurance company for a settlement at the actual cash value basis. Review your homeowner insurance policy, but most require you to rebuild at the current location, or settle for the actual cash value of the home.  This would be replacement cost less depreciation.  You would then need to work out the cost to replace your personal property in the home. That amount should not be affected by the fact you want to move elsewhere.

If you are already out of the house, you should have received some funds for the Loss of Use portion. This is to reimburse you for additional expenses you incur while living elsewhere.  If you have a house payment, and have to pay rent elsewhere, this would be a portion of the loss of use. It would not make your house payment, or pay for food, since you would have to eat whereever you happen to live. 

Discuss your plans with the adjuster assigned to your claim. If you are not satisfied with their response or offers, ask to speak to a supervisor.

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