When a fire or flood strikes, families are abruptly stripped of their homes and left in a state of shock. In the aftermath, it can be challenging to determine what the next steps are.

At NOVA Injury Law, we offer comprehensive support to our clients, assisting them throughout the claims process and securing the most favourable settlement. In this blog post, we will delve into common concerns that often arise when it comes to the adjuster’s management of the repair or rebuilding process for structures in Nova Scotia that have suffered residential damage due to fires or floods.

Insurance Coverage for Structures Lost to Fire or Flood in Nova Scotia

Structural damage to your home is typically the costliest aspect of a fire insurance claim. In certain instances, the extent of fire damage is so severe that the entire home needs to be rebuilt, resulting in a total loss.

Structure or dwelling coverage is the primary component of a homeowners’ insurance policy that protects the structure of your home, but also includes other residential structures such as sheds or garages. In the event of a fire or flood, this coverage helps to repair or rebuild your lost residential structure up to the policy limits.

In Nova Scotia, the extent of coverage for residential structures lost in a fire can differ among insurance policies. Generally, it should encompass the expenses associated with reconstructing a comparable dwelling to the one that was lost.

However, complications can arise when there is a disparity between your vision for the repairs and the recommendations put forth by the insurance company. Challenges often emerge from the insurance adjuster’s handling of the repair or rebuilding process following a fire-related loss. This information aims to shed light on the key terminologies and procedures involved.

Repairing and Rebuilding Structures After Fire or Flood in Nova Scotia

Experiencing structural losses due to fire or flood can be devastating, leaving homeowners facing the task of repairing and rebuilding their homes or other residential structures. In such situations, understanding the insurance company’s process is crucial to ensure a smooth and successful restoration journey.

The first step is to promptly contact your insurance company and file a claim for the structural losses. Provide them with detailed information about the incident, including the date, cause, and extent of the damage. Be prepared to provide supporting documentation, such as photographs, videos, and any other relevant evidence.

Once the claim is filed, the insurance company will assign an adjuster to assess and inspect the damage. The adjuster will evaluate the extent of the structural losses, document the damages, and determine the coverage applicable to your policy. It is advisable to be present during the inspection to ensure that all damages are properly assessed.

Hiring Contractors for Home Rebuild or Repair

Work with contractors, builders, or restoration specialists to obtain accurate cost estimates for the repair and rebuilding work. These estimates should cover all aspects of the restoration process, including structural repairs, materials, labor, and any necessary permits. Provide the estimates to the insurance adjuster for evaluation and approval.

Who will oversee the hiring of contractors for the rebuilding process in Nova Scotia can differ based on factors such as your adjuster, the insurance company handling your claim, and the specific terms outlined in your policy. Typically, insurance providers have a list of preferred vendors whom they may directly hire or strongly recommend for the job. Nevertheless, as the policyholder, you have the right to express your preferences in this selection process.

The Importance of Disclosing Renovations to Your Insurance Company in Nova Scotia

In Nova Scotia, it is crucial to inform your insurance company whenever you plan or initiate renovations for your home or other residential structures. Certain policies may even have specific requirements regarding the timeframe for notification. Failing to disclose renovations to your insurer can result in those improvements not being covered in the cost of repairs following a loss. Consequently, any undisclosed renovations may need to be redone at your own expense.

While it may seem tempting to overlook this requirement, failing to disclose renovations can have significant consequences when it comes to the cost of repairs after a loss. When you renovate your home without notifying your insurer, you run the risk of those improvements not being considered in the assessment of the overall damage. This means that if residential damage occurs as a result of a covered peril, such as a fire or flood, the insurance company may only be responsible for restoring your home or other residential structure to its pre-renovation condition. Any enhancements or upgrades you made will not be factored into the coverage, potentially leaving you with a significant financial burden.

Moreover, undisclosed renovations can result in a lack of coverage for any damages specifically related to those improvements. For instance, if you installed high-end kitchen appliances or added an expensive home theater system, these items may not be covered in the event of a loss unless you informed your insurer and adjusted your policy accordingly. In such cases, you would be solely responsible for the repair or replacement costs.

By notifying your insurance company about renovations, you give them an opportunity to reassess your policy and adjust the coverage limits accordingly. This ensures that your updated structure and its added value are properly protected. It is important to keep in mind that insurance premiums may also be adjusted to reflect the increased value of the property due to the renovations.

Upgrade, Ordinance, and Bylaw Coverage in Nova Scotia

Typically, insurance policies stipulate that your residential structure must be restored or reconstructed to a state that closely resembles its condition before the loss occurred. However, it’s important to note that the building codes are regularly updated to ensure safety, structural integrity, and adherence to evolving standards. Consequently, modifications may need to be implemented to ensure that the new work adheres to the latest codes and regulations.

The purpose of implementing changes based on building codes is to enhance the safety and functionality of the reconstructed home or other residential structure. These codes encompass various aspects, including structural elements, electrical systems, plumbing, insulation, fire safety measures, and more. By adhering to these codes, homeowners can have peace of mind knowing that their rebuilt home meets the highest standards of safety and quality.

Bylaw and upgrade coverage becomes particularly crucial in older homes to address the potential gaps in insurance coverage. As the owner of an older property, it is important to understand that your insurance policy may not automatically include provisions for these necessary upgrades. In addition, even portions of your home that were not impacted by the fire or flood may require updating to keep with building standards.

It’s crucial to understand that complying with current building codes may involve additional costs. These expenses can arise from the need to use specific materials, install updated systems, or employ specialized professionals to ensure code compliance.

If these necessary changes result in additional costs, the coverage amounts provided by your policy may be subject to limitations as per the policy’s terms and conditions. While insurance policies generally cover the cost of repairs or rebuilding, there may be limitations on coverage amounts. This means that if the required changes result in increased costs, the coverage provided by the policy might be limited to the specified amounts outlined in the policy terms.

It is essential to review your insurance policy and understand the coverage limitations and terms related to rebuilding. Some policies may offer additional coverage, known as upgrade coverage or bylaw coverage, specifically designed to address the costs associated with code-required changes. By familiarizing yourself with the policy details and any available additional coverages, you can have a clearer understanding of the financial implications and potential limitations involved.

Out-Dated Finishings

Following residential damage after a fire or flood in Nova Scotia, structures are rebuilt to resemble their pre-loss condition as closely as possible. However, it is important to consider that outdated finishes may require modernization during the rebuilding process.

Outdated finishes, such as old-fashioned wallpaper or obsolete flooring materials, may not align with current design trends or industry standards. In such cases, it may be necessary to modernize these finishes during the rebuilding process.

Modernizing outdated finishes serves multiple purposes. It not only brings the home or other residential structure up to date in terms of aesthetics and style but also ensures that the materials used are in line with current safety and quality standards. For example, replacing worn-out carpeting with more durable and eco-friendly flooring options or upgrading outdated plumbing fixtures to more efficient models can enhance the overall functionality and sustainability of the rebuilt home.

Additionally, insurance policies may contain provisions that allow the insurer to use industry-standard finishes instead of exact replacements. This provision enables insurers to streamline the rebuilding process by utilizing commonly used materials and finishes that are readily available in the market. While this may introduce slight variations from the original finishes, it ensures practicality and cost-effectiveness in the reconstruction efforts.

Global Cash Settlement

A global lump settlement for structure coverage is an agreement between the homeowner and the insurance company that involves accepting a single lump sum of cash as a settlement for various aspects of a claim related to a fire or flood. This type of settlement transfers the responsibility for rectifying the structural damage to the homeowner, providing them with the flexibility to manage the rebuilding process independently.

When a fire or flood damages a home, insurance policies typically cover the cost of repairing or rebuilding the structure. However, instead of going through the traditional process of submitting itemized claims for each aspect of the damage, the homeowner may have the option to negotiate a global lump settlement with the insurance company.

By accepting a global lump settlement, the homeowner agrees to receive a predetermined amount of money to address the structural damage caused by the fire or flood. This lump sum is intended to cover all the necessary repairs, including materials, labour, and other associated costs.

Pros and Cons of a Global Cash Settlement

One of the key advantages of a global lump settlement is that it provides the homeowner with greater control and flexibility over the rebuilding process. Instead of having to seek approval for each repair expense, the homeowner can allocate the funds as they see fit. This allows them to make decisions based on their priorities, preferences, and budget.

However, it’s important to recognize that accepting a global lump settlement also comes with certain responsibilities and considerations. Once the settlement is agreed upon and received, the homeowner assumes the sole responsibility for managing the budget and ensuring that the repairs are completed within the allocated funds. If the homeowner exceeds the budget and additional funds are required, the insurer is typically not obligated to provide further financial assistance.

To make the most of a global lump settlement, careful planning and budgeting are essential. The homeowner should thoroughly assess the extent of the damage and create a detailed estimate of the repair costs. It is advisable to consult with professionals, such as contractors or structural engineers, to ensure accurate cost estimates and to prioritize repairs based on safety and structural integrity.

Additionally, it is crucial for homeowners to be mindful of any building codes, permits, or regulations that may impact the repair process. Compliance with these requirements is essential to ensure that the rebuilt structure meets the necessary standards.

Furthermore, homeowners should keep detailed records and receipts of all expenses related to the repairs. This documentation will be vital when working with the insurance company to demonstrate that the funds were used appropriately.

Get Support for Your Residential Structural Damage Claim in Nova Scotia

At NOVA Injury Law, our clients are our top priority. We understand the profound impact that a residential fire or flood can have on families, and we recognize the complexities involved in navigating the claims process that follows. Our commitment is to provide you with unwavering support and the necessary resources to secure compensation and rebuild your cherished home.

You can learn more about how we handle residential damage claims here.

If you are in need of legal advice or representation for residential damage claim and are located in Halifax, Bedford or the wider Nova Scotia area, our personal injury lawyers are here to help. Contact us today and tell us more about your claim.