Our insurance adjuster has informed us that they are going to consider our house a total loss due to confirmed sinkhole activity and send us a check for the dwelling coverage. This is not the results we wanted as we do NOT want to sell our home and move. We asked about replacement cost as we have "guaranteed replacement cost" which to us means that the insurance company should fix the problem regardless of the cost. We were told that they will pay up to 20% more than our dwelling coverage but only if we fix the sinkhole, however the insurance company has decided not to be invoved in the repair and will still payout as a total loss. If we contract for repair ourselves and it exceeds the dwelling coverage which it likely will, the insurance company will pay us up to 20% more.
We also asked about the new insurance policy which we received renewal notice for and already paid the premium in full. Since the dwelling coverage is $16K more on the new policy we wanted to know if the total loss payout would be this amount or the lower amount of our policy when the claim was filed. We were told that the total loss payout will be based on the amount of coverage at the time the claim was filed and not at the time of payout nor at the time sinkhole determination. That of course means less money to us.
We also asked about other structure coverage as we have a separate permanent storage shed of substantial size, however it is constructed of wood and it would be difficult to prove that it is affected by the sinkhole - ie no visible cracks since it is wood. We were told we would have to prove it is affected via cracks, jammed doors, etc.
We have three questions:
1) Is the explanation given to us by the insurance company regarding replacement cost accurate?
2) Is the information we were given regarding the total loss payout something we must accept or should the insurance company pay based on current date and current coverage?
3) Is it true that in the case of a total loss payout that the other structure coverage is not paid unless damage is proven to exist to that structure?
Any assistance would be greatly appreciated.