Our retirement home burned to the ground in Oct. 2008. Our…

Hello Debra:

I have pasted the more complete (less generic & more specific) outline of our situation below:

Thank you.

Peter

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Our retirement home in the Beaver Valley near Collingwood, purchased 20 year's ago, burned to the ground during the night of Oct. 30, 2008, probably of electrical causes.

The property was insured with Insurance Co X; a Proof of Fire Loss Form has, on the advice of Insurance Co. X, yet to be filed with them.

Our home,classified as Residence 2, and as a Seasonal Home, on Insurance Co. X's policy documents, was insured by that company on a Replacement Cost basis, with a replacement estimate of $348,000. Personal property loss was also on a Replacement Cost basis, with a replacement estimate of $139,200. The total policy limit for the house & contents was $487, 200, minus a $500 deductible.

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The actual cash value of the home was estimated by Specialized Property Evaluation Control Services, on behalf of Insurance Co. X, to be $ 830,563.54.

The replacement value of the home contents was estimated by the Claims Network, on behalf of Insurance Co. X, to be $181,586 with a depreciated value of $87,000.

First General Services of Hanover, Ontario, subsequently provided an estimate of $611,172.94 to Insurance Co. X to rebuild the home.

Subsequent to the fire, there have been/continue to be environmental assessment (fuel oil was thought to have been lost), debris removal, furniture storage & treatment and other costs of approx. $90,000; Insurance Co. X has paid these costs, and will likely continue to do so; however, Insurance Co. Xc ontinues to insist on taking these costs off the top of any settlement.

Our insurance policy explicitly states that we are, inter alia insured A) against loss or damage resulting from the release of fuel oil resulting from fire, and B) for the costs of debris removal resulting from fire.

Insurance Co. X wishes to settle for approx. $402, 000, i.e. the coverage limit of $487, 200.00 (plus 1% inflation for 12 months) = $492,072, but minus the approx. $90,000 that has been/will be spent on post-fire, pre-reconstruction costs; the settlement offer does not include any stipulations re where, whether, and when to rebuild.

My wife and and I are at the stage where we are evaluating the wisdom of accepting, or not accepting, the insurance company's settlement offer. Thus:

Q1. Are there rational and reasonable, i.e. winnable, legal grounds on which to contest this settlement ?

Q2. Do the words Replacement Costs mean anything legally, or are they ‘trumped' by the explicit Policy Limits of the insurance policy?

Q3. Although the policy insures for costs involving fuel oil loss, debris removal, storage & smoke treatment, it does not explicitly state that these costs come off the top of policy limits. Legally, is this understood, or can this be fought, i.e. could the insurance company be legally liable for some or all of the $90,000 upfront costs?

Hello Debra:

I thought for sure that I had accepted your answer, so that you are able to get paid; however, you have indicated that I haven't. Over this message I see an Add Bonus (in Orange) and an Accepted with a Checkmark; is the latter what I should click?

Thank you