Burnt to the Ground

Hi Barefoot,

Our house burnt down due to my laptop catching fire. It is a total loss. I want to make sure I make the best decision with the insurance money, but it is overwhelming. Our mortgage is $286k, while our insurance is $280k for the house and $110k for contents. Our options are to rebuild the house (with the insurance company helping us) or to take the money. What should we do?

Mandy and Steve

Hi Guys,

I feel for you guys.

Hindsight is a wonderful thing, and a few years on from our fire, here’s what I’ve learned:

Your insurer is not your friend. They are not there to help you. Their job is to pay out as little as possible.

So, read your contents policy slowly. Then read it again. If need be, think about paying an insurance professional to act on your behalf.

The second thing I learned is not to rush any major decisions. When it happened to us, all I wanted to do was get back into our house, and get our family back to normal. Yet the truth is that things won’t be normal for two years -- at least. That’s your reality. The sooner you accept it -- the better long-term decisions you’ll make.

Scott