Originally posted by @Marina Loos:
@Jose Linares - The insurance adjuster estimated the damages to be at 192k which came very very close to the estimate that my restoration contractor (who was a previous insurance adjuster for over 20 years) also came up with. The coverage that I had was for 174K and @John Teachout it is replacement cost. This leaves me almost a 20k difference. The estimate of course, is inclusive of everything to get the house back to being rentable. I did receive payment in full for the insurance coverage that I had including rental reimbursement.
When I purchased the house 3 years ago the amount of insurance I purchased exceeded the value of the house. Of course, the last few years we've seen an increase of value here. I don't mind putting in a few thousand but I am hoping that since the fire report stated it was negligence and the tenant admitted to smoking in a nonsmoking lease that the additional sum I need would be covered by subrogation. I can suffer a few thousand out of my pocket but I don't want to do more than that.
I admit this is all very new to me and I am trying to learn as much as I can. Right now basic work is being done on the house and if I can't get the extra money from the tenants insurance then I will have to figure out where to cut the costs in the rehab.
The value of the home only plays a factor if this would have been a total loss. Unless the home was simply under-insured by your agent. It is still not clear where you are experiencing the $20K in variance. Has the contractor/former adjuster explained to you what scope of work is causing the variance? Does it exceed the additional coverages (code upgrade, debris removal, etc)?
Subrogation is more for the carrier to pursue what they paid out & your deductible. If you went through the tenants insurance, they also typically only pay Actual Cash Value (ACV). So you are handling it correctly by filing a first-party claim.
