Financial Obligations after a House Fire Incident: What You Need To Know

One of the worst things that can happen to an individual or a family is to lose their home because of fire. House fires are divesting that it does not only pose damages to properties, but it can go as far as taking away lives. Emotionally, it can be a traumatic experience. It would be challenging to restore everything to the way they used to, because the reality is, they would never come back to their pre-house fire condition. A house or a property is something people invest much in and a house fire only burns down their hard-earned investment.

The common practical questions asked after a house fire, when everything is cleared and the flames are extinguished are: Where can I find an expert in debris removal? Should I demolish my house or just renovate the damages? What claims can I get from the insurance? Do I still have to pay my financial obligations for the house?

The last thing a person who just experienced a house fire will think about is his financial obligations, including his monthly mortgage. But whether you he likes it or not, it should be one of the top list priority.

Now, let us answer that last question. The financial obligation (mortgage) of the person whose property has been damaged due to natural and man-made disaster like house fire does not stop despite the situation. If you are paying a monthly mortgage as a homeowner, yes you should continue paying your mortgage after a house fire. You might be uninspired and lose the will to continue paying your financial obligations due to what is in front of you. But abandoning your burned house and abandoning a perfect house is just the same thing. If you abandon your burned house, it will greatly affect your credit score and you will be considered an irresponsible payer. This will also affect your plans to rebuild a house because of your reputation.

A homeowner’s insurance is helpful during this catastrophic time. This insurance does not only benefit the company by protecting their investments since your property is a collateral that ensures your loan for the mortgage, but it can also benefit the homeowner in unfortunate events like house fire.

Should it happen that your home is wrecked and dilapidated, your insurance as a home owner can cover your needs to compensate for the loss. The insurance will also include securing a place you can rent including your cost of living. In this case, you need to document your expenses. This policy secures your immediate and basic needs. How about the mortgage? In your dwelling coverage policy in your homeowners insurance, your property upon purchase was given a price as a replacement value of your home. This policy has provisos. One thing you must be aware of is that for sure, the payment initially goes to the bank, and the rest will be give to you. The amount you receive is what you can spend for reconstructing your property or to purchase a new home.

Another coverage called the personal property coverage is a percentage of your dwelling coverage. You can use this to buy furniture, appliances, and other needed items in the house. The policy honors the replacement cost, or the value of the property as bought. Example, when you bought an appliance worth $2,000 several years ago, the same amount will be given to you to replace it. It is wise to have a detailed inventory of your possessions and proper documentation.

Make sure that you are knowledgeable about your policy and the extent of its coverage. When in doubt, inquire to your insurance company or agent.

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