They aren’t asking for reimbursement there - it’s contained in the acquisition fee.

Michael Bertsch Casualty loss deductions and insurance reimbursements decrease basis.

.• The insurance or other reimbursement you received from the casualty or theft.• How you figured the gain.Replacement property acquired before return filed.

File your claim with your insurance company--they will be the ones to determine what needs to be done and then they will subjugate to the tenant's policy for return/reimbursement of your deductible.The tenant should have NO SAY in what your carrier says must be done. 

You may want to be prepared to get an attorney involved because they might want to be "reimbursed" for their expenses or want their "property" back (i.e. kitchen appliances.)

His son worked with him too and said to save all my receipts and he will reimburse me whenever he gets through probate and can access his funds. 

I assume we'll need to reimburse them for the cost.  

What I mean by this is, as an example, a bank might expect a GC to do the work, buy all the materials, and get reimbursed later. 

My wife is driven by this & when we bought & completely rebuilt our Lakehouse we started to invest in the immediate area to AGAIN reimburse us for any & all the rehab & ongoing operating costs of our Lakehouse.

If the owner redeems (pays off the taxes) then they have to reimburse you for your legal fees.