State Farm Not Paying Replacement Cost for Homes Damaged by Tornadoes?
Unfortunately for Alabama homeowners, tornadoes can be all too common. When someone’s home is damaged by a tornado, they expect for their homeowners insurance to cover it. Generally, most people buy replacement cost coverage to protect their homes. When they buy replacement cost coverage they expect that the insurance company will pay to replace their home if it is destroyed. In fact, usually when a person buys homeowners insurance, their insurance company sets the amount of their dwelling coverage based on the anticipated replacement cost of the home. Insurance companies use very sophisticated software to do this. They collect premiums based on this amount.
When a home suffers a serious weather event like a tornado it often must be completely replaced rather than just prepared. This can occur because of extensive damage to the dwelling , to the frame, or to the foundation. Often, a house may not appear to be completely destroyed but still must be replaced due to irreparable structural damage. When this happens, it can be unsafe too try to repair the home. Usually, a structural engineer will need to get involved to determine weather structural damage or foundational damage requires the replacement of the home.
Unfortunately, we have heard lately of instances in which State Farm is attempting to pay only repair costs for homes that should be completely replaced. We also have heard that State Farm has implemented a policy of saying that every roof can be repaired , even when qualified engineers an roofers say that due to its age and condition the whole roof must be replaced. When companies do this intentionally, they potentially commit insurance bad faith. An insurance company cannot deliberately cut costs at the expense of its policy holders. If you think that this could be happening to you, please let us know and we will be happy to answer any questions.