A topic that has been written about several times on our blog is about the consequences of selling the home or property during an insurance case. Remarkable posts include Things to keep in mind when selling a property with an open insurance claimand Restore the cost of compensation after selling unrepaired property, by attorneys Kyle Bugden and Ashley Harris, respectively. Due to the real estate landscape in today’s market, it has once again become a common topic of conversation.
It is no surprise that this topic is so well documented; It is very common to sell your property despite an ongoing insurance claim. While most articles focus on the consequences of doing so before repairs are completed, this blog will focus on a less discussed situation: What happens if I have already done the repairs? Can I still get the cost back?
The simple answer is yes, you can get back the cost of repairing the property (provided coverage is established). This may not come as a surprise due to the relatively simple application of most homeowners̵7; insurance policies.
Consider the following policy provision:
Carrying out the repairs simplifies the complaint in many respects when the policyholder decides to sell his home, as the damage assessment is much more difficult to dispute. The inability to reclaim depreciation for unrepaired damage after selling the property can provide a decent incentive to proceed with repairs. More importantly, I have yet to see a homeowner’s policy that includes language restrictions on a policyholder’s right to recover solely because of the decision to sell the property. However, there are a few things to keep in mind if you have an open claim and want to sell your property:
- Although there may not be a policy provision that specifically addresses the decision to sell the property, the terms clause still applies. This means that failure to notify the insurance company of your intention to sell will almost no doubt be met with accusations of prejudice.
- If your insurance company has not yet made an insurance decision, it may be beneficial to have proper inspections by appropriate experts earlier to perform the repairs. This is not limited to situations involving the sale of the property and applies to all cases of repair efforts before coverage.
- Save your receipts. Every invoice, estimate, receipt or other form of proof that shows the total amount of costs incurred and the basis for each payment is extremely important after repairs. This is double for policyholders who intend to sell the property, as you no longer have the right to carry out the inspection and prove which repairs have been made / necessary.
Although the call and response given in this blog may not be shocking to most people involved in this area, the question is still one of the most commonly asked by policyholders. This trend will undoubtedly continue until the market cools down. As long as you keep in mind the terms and conditions that remain applicable throughout the claim, there is usually no problem with moving forward with the sale. If you have an open insurance claim and have questions regarding the sale of your property, Merlin Law Group’s attorneys are here to answer them.