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Answers (7)
- NTETS, "Mr Caveat"
- Contributions:6436
you should be able to writeoff up to 3000 as part of a capital loss and deduct the rest from future tax years. if you sell investments to make up the difference, you should be able to write off most of that too.
- DanaEv
- Contributions:62
I know this thread is a little old, but it's always a good question, so I wanted to add a little something to the conversation.
There are many different types of homeowner's policies. You can buy a replacement cost policy, and it will pay to literally completely replace your house back to the status it was before it was damaged. Of course it's more expensive, but it is something to think about it. You can get a policy that covers your furnishings separately, therefore you don't lose the ability to refurnish your home once you rebuilt. You can buy "riders" for your policy that will cover things like expensive jewelry, heirlooms, etc., although they have to be appraised first and the insurance company has to have the appraisal on file. That rider is good also if your house is broken into and your diamonds or gold is stolen, as regular homeowner's policies won't usually cover those except for a very set amount since they don't know how much jewelry you may have. (my mother worked in the insurance industry for 35 years and has often told me to get a rider for my jewelry, but I just haven't done it yet; they recommend that if you have more than a couple thousand dollars worth of jewelry that you get it all appraised and buy a rider for it specifically)
Getting a policy that is the same amount as what you owe or what the house is worth isn't something I would want to do. The bank has to be paid first, and if you owe a lot, you may end up with a check that will cover rent on an apartment and that's it.
If you rent but don't own, always have a renter's policy. They cost a little bit of nothing and will cover all the contents (you can choose the amount of the policy, whether it's $50,000 or $20,000).
I don't know all the ends and outs of insurance, only what Mom has said over the years about things that have happened at her insurance office, so take what I say with a grain of salt. Twenty years ago or more they didn't have replacement cost policies but they do now so that would be my first choice.
There are many different types of homeowner's policies. You can buy a replacement cost policy, and it will pay to literally completely replace your house back to the status it was before it was damaged. Of course it's more expensive, but it is something to think about it. You can get a policy that covers your furnishings separately, therefore you don't lose the ability to refurnish your home once you rebuilt. You can buy "riders" for your policy that will cover things like expensive jewelry, heirlooms, etc., although they have to be appraised first and the insurance company has to have the appraisal on file. That rider is good also if your house is broken into and your diamonds or gold is stolen, as regular homeowner's policies won't usually cover those except for a very set amount since they don't know how much jewelry you may have. (my mother worked in the insurance industry for 35 years and has often told me to get a rider for my jewelry, but I just haven't done it yet; they recommend that if you have more than a couple thousand dollars worth of jewelry that you get it all appraised and buy a rider for it specifically)
Getting a policy that is the same amount as what you owe or what the house is worth isn't something I would want to do. The bank has to be paid first, and if you owe a lot, you may end up with a check that will cover rent on an apartment and that's it.
If you rent but don't own, always have a renter's policy. They cost a little bit of nothing and will cover all the contents (you can choose the amount of the policy, whether it's $50,000 or $20,000).
I don't know all the ends and outs of insurance, only what Mom has said over the years about things that have happened at her insurance office, so take what I say with a grain of salt. Twenty years ago or more they didn't have replacement cost policies but they do now so that would be my first choice.
- Terri Habecker, "Commercial Insurance"
- Contributions:13
This would be an excellent question to ask your Tax advisor. I'd be interested in knowing the answer.
Since you asked the question, I would like to get this information out, in hopes in saving someone else from this bad experience.
We had many homeowners in the 80's who had to walk away from the Laguna Fires because they didn't have adequate insurance on their homes. As an agent, I have been questioned many times about the Marshall & Swift replacement figures we use. On every home, our office adds 125% coverage and Building ordinance coverage to protect our clients from this devistating reality when their home is gone and not enough coverage to replace. "Self Insuring" or dropping homeowner insurance, altogether ( I did see that happening when interest rates rose in this last housing boom and people were heading towards foreclosure) Sure enough, when Insurance was dropped, I did see losses out there. I had several customers ask to cancel their insurance because of foreclosure, when they were still owners of the property and because of the liability, I advised my customers not to drop their Homeowner Insurance until the Bank was the named owner.
Good Luck to you. I hope you get some help. Maybe you can find a contractor who will let you put in some sweat equity?
Since you asked the question, I would like to get this information out, in hopes in saving someone else from this bad experience.
We had many homeowners in the 80's who had to walk away from the Laguna Fires because they didn't have adequate insurance on their homes. As an agent, I have been questioned many times about the Marshall & Swift replacement figures we use. On every home, our office adds 125% coverage and Building ordinance coverage to protect our clients from this devistating reality when their home is gone and not enough coverage to replace. "Self Insuring" or dropping homeowner insurance, altogether ( I did see that happening when interest rates rose in this last housing boom and people were heading towards foreclosure) Sure enough, when Insurance was dropped, I did see losses out there. I had several customers ask to cancel their insurance because of foreclosure, when they were still owners of the property and because of the liability, I advised my customers not to drop their Homeowner Insurance until the Bank was the named owner.
Good Luck to you. I hope you get some help. Maybe you can find a contractor who will let you put in some sweat equity?
- Terri Habecker, "Commercial Insurance"
- Contributions:13
This would be an excellent question to ask your Tax advisor. I'd be interested in knowing the answer.
Since you asked the question, I would like to get this information out, in hopes in saving someone else from this bad experience.
We had many homeowners in the 80's who had to walk away from the Laguna Canyon Fires because they didn't have adequate insurance on their homes. As an agent, I have been questioned many times about the Marshall & Swift replacement figures we use. On every home, our office adds 125% coverage and Building ordinance coverage to protect our clients from this devistating reality when their home is gone and not enough coverage to replace. "Self Insuring" or dropping homeowner insurance, altogether ( I did see that happening when interest rates rose in this last housing boom and people were heading towards foreclosure) Sure enough, when Insurance was dropped, I did see losses out there. I had several customers ask to cancel their insurance because of foreclosure, when they were still owners of the property and because of the liability, I advised my customers not to drop their Insurance until the Bank was named Owner of the property.
Best of luck to you!
Since you asked the question, I would like to get this information out, in hopes in saving someone else from this bad experience.
We had many homeowners in the 80's who had to walk away from the Laguna Canyon Fires because they didn't have adequate insurance on their homes. As an agent, I have been questioned many times about the Marshall & Swift replacement figures we use. On every home, our office adds 125% coverage and Building ordinance coverage to protect our clients from this devistating reality when their home is gone and not enough coverage to replace. "Self Insuring" or dropping homeowner insurance, altogether ( I did see that happening when interest rates rose in this last housing boom and people were heading towards foreclosure) Sure enough, when Insurance was dropped, I did see losses out there. I had several customers ask to cancel their insurance because of foreclosure, when they were still owners of the property and because of the liability, I advised my customers not to drop their Insurance until the Bank was named Owner of the property.
Best of luck to you!
- wetdawgs
- Contributions:26854
So sorry to hear of your loss. This is why they tell us to review our coverage amount periodically.
- Daniel Reynolds, "Broker Executives"
- Contributions:355
A renters policy as it's called covers all personal contents within the house. Hopefully, your agent told you about this and you're covered. You can usually take out a policy of 50k for less than 15 bucks per month.
- sunnyview
- Contributions:25139
In most areas, no. If you have a total loss, but the policy coverage is not sufficient to cover rebuilding you can pay the difference yourself, build a smaller replacement house or opt to not replace the contents putting all of the coverage toward the rebuilding. in short, total loss on an underinsured house stinks. My childhood family went through one of those and our homeowners policy was maxed out on contents before the cost of rebuilding was ever included. Some tax credit are available for energy efficiency, but most will not contribute significantly to the rebuilding cost from what I have seen/read.
what if most of your house was damaged by fire and your insurance doesn't cover the whole amount
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