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Home Insurance Forum

Nov. 9, 2007

We had a house fire in November 1996 in Montgomery County, Texas. Although the home was "saved," we lost nearly all of our contents due to smoke damage and there was significant interior damage (non-structural). While our insurance company paid to the policy limits on our contents, our claim actually exceeded the contents coverage of our policy which was 60 percent of the structure coverage for replacement cost.

In researching our original policy as well as renewals, it became obvious that we were underinsured the day our policy first was in effect. This is because, as we have learned, it is much more expensive to rebuild a house after a loss than it is even for new home construction. There are costs associated with demolition, refuse removal, storage, and restoration costs of contents that survived. These costs and what actually happens to you after a loss were not discussed by the agent when they sold us the policy. After the fire, we rebuilt and we increased our insurance coverage to cover a total loss.

We would like to know if there is any precedent for settling claims for under-insurance on contents coverage due to the agent's lack of explanation and poor advice on telling us what to insure the home for in the first place?

The second part of my question is related to 911 operators/liability. We experienced about an 18-minute response time to the fire because the 911 operator dispatched the wrong fire department. The nearest fire department was only six to seven minutes away and the extra 10 minutes of "burn-time" certainly added to our loss total.

In addition, we later found out that the local phone companies were not sending the updates to the 911 system to update their computers for new homes and addresses in the area. Is the 911 office responsible? Or is there any liability on the part of the phone company?

Daniel, Texas

Dear Daniel,

I spoke with Jim Davis, spokesperson for the Texas Department of Insurance. First, he says that you should definitely consult a lawyer about the array of troubles you've encountered.

Davis also says you should contact the insurance department and file a complaint. If you visit Insure.com's Texas page, you'll find the department's address, phone number, and a link to its Web site. "If a complaint is filed, we can really take a careful look at the circumstances and the policy involved, so we can see if anything should be done," explains Davis.

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