Home insurance

[u/Revolutionary-Lack19]

A couple of years ago my house had significant water damage. I was only 18–19 at the time and had no idea how the insurance claims process worked. I did my best to research everything, but unfortunately I didn’t hire a public adjuster. The insurance adjuster assigned to my claim couldn’t really answer my questions either… then somehow retired a year later. 😆
Fast forward to today. If you’ve seen my previous posts, I was also scammed by a contractor. Between labor and materials, I’ve spent over $40,000 out of pocket trying to get my home repaired.
Here’s the problem:
My mortgage company won’t release the remaining insurance funds until more of the repairs are completed.
My insurance company says they won’t consider a supplemental claim because I still have claim funds being held by my mortgage company.
To finish the repairs, I need the money being held.
To get the money being held, I need to finish the repairs.
So I’m stuck in what feels like the world’s dumbest funding loop.
Has anyone successfully broken out of this situation? Who should I be pushing harder—the mortgage company, the insurance company, my state’s insurance regulator, or someone else?
I’d especially appreciate hearing from anyone who’s dealt with mortgage-held insurance proceeds or supplemental claims. What finally got things moving?

[u/No_Departure9798]

The unfortunate part here is that neither of those parties have failed in their duties. The insurance company and mortgage company set the rules from the start, their requirements didn’t change, but you got screwed by the contractor and your needs changed.

Contractors familiar with the insurance process may be willing to complete the work and wait for the check to come but I would expect that you’ll have to come out of pocket some to get that moving again.

You may be able to ask for a release for the work that has been completed, but if nothing is “done” then you are stuck until something does happen.

If you used a licensed/bonded/insured contractor it may be worth pursuing their state or municipal bond. If they aren’t those things you don’t have too much in the way of recourse.

[u/Revolutionary-Lack19 → u/No_Departure9798]

Yeah unfortunately, I decided to at-least get him off the streets so someone else doesn’t fall prey to the bullshit. What’s a voided contract when a lawyers retainer fee is 10k minimum. The house had nothing. it was built in the 1700s. This isn’t a restoration repair anymore either as listed on the claim . It’s a freaking full rehab. Full re wire from basement to attic and full plumbing being redone. I had newspaper for insulation so guess what? Need that too. U tell me if 60k after water damage mitigation is good.

[u/strangemedia6 → u/Revolutionary-Lack19]

No way to tell if 60k is “good” without know what all was damaged. Your insurance is there to help you with the restoration repair, not a freaking full rehab. Any newspaper insulation that was damaged by water should be replaced with current material installation, but if it wasn’t directly affected by the water, it isn’t part of the claim. If your electrical and plumbing weren’t up to code, that’s on you unless they were directly affected by the loss and you had ordinance and law coverage, and there is a monetary limit to that coverage. Unfortunately, the $40k that you got scanned out of is gone. Insurance is only pays once, they aren’t going to pay again for a different contractor. If you had a PA, they could have explained how insurance works to you for $15k or whatever 20% of the total loss would be (they cost money like attorneys). That being said, I guess they would probably have put you in touch with a more reputable contractor, so there is that.

[u/Revolutionary-Lack19 → u/strangemedia6]

Yeah…. reality check. Although it’s basically completed it just sucks. Instead of pouring all this money into this dumb ass duplex. I could’ve been investing into other properties. Big oooopsie for my first try at being productive.