HANCOCK COUNTY — A Hancock County family who lost their home in July has a word of advice for homeowners when it comes to your insurance policy.
Their home burned down during a 4th of July fireworks celebration and now they're having a tough time rebuilding it.
After the home caught on fire, the Vance family thought it was fully covered by the insurance company, but the family says with today's costs that's not the case.
"We had estimates as high as $550,000 to $600,000 to replace exactly what we paid $265,000 for in 2018," said Richard Vance.
Richard Vance and his wife searched for three months to find an affordable contractor to help re-build their McCordsville home.
"The same home is going to cost about $450,000 to rebuild. The builder is willing to work with us and bring numbers down a little so we will meet in the middle and we will just make it under the wire. Just barely be able to rebuild our home and replace what we had before the fire," said Vance.
Vance said, with water damage, their forever home was considered a total loss.
"It's been crazy," he said.
Vance, sat down with WRTV and shared his homeowners policy.
"Well we were insured with addendum and add ons for $401,100. Now, actual cash value they are willing to pay for the loss was $293,943.34. That's a far cry between those two numbers," said Vance.
He said the reason for the difference in the check presented to him and the $401,100 coverage amount is because of depreciation, addendum and more.
Although documents show he had insurance to cover the market value of his home, he said it isn't enough to re-build his home.
Something he said he wishes they would've known sooner.
"Every year you should review your policy first of all and when you do don't focus on fact of what the value of your home is in today's market. That is meaningless. What you need to focus on is the cost to rebuild your home. There is a tremendous difference between value of your home and cost to rebuild," he said.
"If you look at the current real estate market our home is valued at $360,000 so we are thinking we have around $400,000 in coverage, oh we are fantastic. That's not the case. It cost more money than that to rebuild a home. In today's industry in Indiana it's $170-195 a square foot to rebuild a home and if you do the math it comes out to more than $401,000 so you need to focus on cost to rebuild not the value of the home," said Vance.
The family was only able to salvage a few photos and personal mementos.
"Those photos from that moment in time cant be replaced. One picture is of my daughter getting married on the 30th and it's her in a wedding dress when she was 6 years old and you can't replace those things ya know," said Vance.
He said the fact everyone made it out okay means everything, but he's hoping by sharing his story he can help educate other homeowners about insurance policies.
"It serves a purpose. It's there to protect you, your future, children, grandchildren, home everything our wife and I managed to gather 60 years. Don't take it lightly. Make sure your insured to replace it tomorrow. Not what you think it's valued at, but what it would cost to replace it," said Vance.
He also encourages homeowners to not downplay your deductible.
"Two weeks before this fire, in a cost saving meeting, my wife and I decided to change our deductible from $1,000 to $10,000 thinking a fire? Not going to happen to us. Well it did. So now, instead of $1,000 I gotta pull $10,000 outta my pocket. It's a lot of money," said Vance.
Vance said his insurance company has been working hand and hand with the family. He can get thousands more once they show proof of new purchases.
