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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
Experience:  10 years experience
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I'm getting issued a insurance claim check due to a total

Customer Question

I'm getting issued a insurance claim check due to a total loss of my home. I want to pay off my mortgage and use what's left to start to rebuild myself. My insurance company says they will send my mortgage company the pay off but I can collect all of my part of the money until I spend 140,000 rebuilding my home. I can rebuild for much less? Is there anything I can do to get the full amount I'm owed?
JA: Because real estate law varies from place to place, can you tell me what state this is in?
Customer: Texas
JA: Has anything been filed or reported?
Customer: Not yet
JA: Anything else you want the lawyer to know before I connect you?
Customer: No
Submitted: 5 months ago.
Category: Tax
Expert:  Matthew Breecher replied 5 months ago.

Hello, I would like to assist with your question. Can you please clarify your questions. You state: "I can collect all of my part of the money until I spend 140,000 rebuilding my home." This appears to be a typo, should this be "I cannot collect" instead?

Customer: replied 5 months ago.
Correct. Cannot collect. I owe 124,000 on my home. Insurance claim is 200,000. I want to pay off my mortgage and use what's left to start building a new home. The insurance company says i can have 25000 to start but I can't receive the rest until I spend at least 140,000 rebuilding. I can rebuild for less than 100,000. Can they dictate how I spend what's left after the mortgage pay off?
Expert:  Matthew Breecher replied 5 months ago.

That is getting more complicated than what can be answered on this website. To start, you would have to read your insurance contract and determine the exact clause they are using. Or, finding that no such clause existed and arguing you are entitled to the payout. My experience has been primarily with business casualty losses. I am sorry I cannot assist you, this is better situated for a real estate attorney licensed in Texas. Accordingly, I will opt out.

Customer: replied 5 months ago.
Thanks
Expert:  Lane replied 5 months ago.

Hi My name's Lane. I can help here.

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice to clients on three continents since 1986.

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This is a contact law issue.

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An insurance policy is a contact between you and the insurance company. They can do whatever the language of the contract allows, as long as it's legal.

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And holding back some of the benefit until certain contractual obligations are fulfilled is certainly legal

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Sometimes endorsements and riders to the contract like this are a product of a lower insurance premium that would be the case if this were a full indemnification contract.

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I'd be glad to read the contract for you is you'd like to provide it.

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But, so sorry, yes, this is certainly possible (only a reading of the contract will tell us for sure). If this is NOT in the language of the contract, you may have a breach of contract cause of action.

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If you'd like me to take a look - black out or don't include any personally identifiable information (name, address, social security number, etc) and use the paper clip icon to attach.