Q: We live in a townhouse. The unit attached to ours suffered a major fire. The fire also caused considerable damage to our house. We have been in temporary housing for 17 months while waiting for our house to be restored. We have exhausted our insurance allowance through our insurance company. We recently learned that our neighbor’s bank had foreclosed on the house that caused the fire. Can we put a lien on this house for our personal expenses after our coverage has reached its limit?
A: First of all, we are very sorry that this happened to you. It’s one of those curve balls that life sometimes throws around that can really turn your life upside down. The upside, of course, is that you don’t seem to have any health issues related to the fire.
We assume that you and your neighbor own your respective townhouses and are not part of a homeowners association. So you have insurance on your house and your neighbor has insurance to cover damage or loss of the property. In some homeowners associations, the association carries insurance that covers damage or loss to buildings and homeowners only need insurance coverage for the interiors of homes (and contents of the home) .
The main reason to buy home insurance is to protect yourself against catastrophic events, which is what that fire was. You have been away from home for 17 months and your insurance has covered your expenses for living away from home after a claim for up to 12 months. Now that the 12 months are up, any additional housing expenses you incur are your responsibility.
If you have sufficient insurance coverage, your policy should cover reconstruction, repair and restoration of your home. We suspect your insurance company is doing this, as you did not mention any issues with the amount of money your insurance company provides for restoration. It seems like the only problem you have is how long it takes you to rebuild after the fire.
As for your neighbour, you may well have a claim against him for the fire that broke out in his home. Did your neighbor have sufficient home insurance? Maybe not, since it looks like they’ve decided to move on and let their lender foreclose.
If your neighbor doesn’t have insurance or doesn’t have a big enough policy, getting money from your neighbor or their insurer could be an uphill battle. Your neighbor may have some coverage, but not enough to cover needed repairs to their property. It is also possible that they have also taken out a liability insurance policy covering not only repairs to your property, but also your losses due to fire.
Your insurer may have already thought about this and filed a claim with the neighbor’s insurance to cover the cost of repairs and disbursements to your home in town.
That doesn’t mean it’s not worth exploring. Talk to an insurance claims attorney about your options and whether it’s worth doing some research first to make sure you have a good chance of getting something from the neighbor or their insurer. .
Why do we say this? Suppose your neighbor’s liability limit on his insurance policy is $300,000, and the insurance company paid this sum to the neighbor and his lender (since there was a mortgage on the property). We doubt you would get any money suing the neighbor in this situation.
But if the neighbor has a million dollar limit on their policy and has only used $300,000you have the possibility of being reimbursed and also of benefiting from the assumption of legal fees.
Ilyce Glink is the CEO of Best Money Moves and Samuel J. Tamkin is a real estate lawyer. Contact them via the website ThinkGlink.com.
Caption: An insurance claims lawyer may be able to help after a fire. The time of dreams
