What Happens When Your Houston Home Is A Total Loss After A Fire
Hearing that your home is a total loss is hard. Here's what it means, how the money works, and the choices you have next.
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The Short Answer
- Total loss usually means repairs would cost about as much as rebuilding.
- Ask for every policy limit in writing: dwelling, belongings, living expenses.
- Your choices: rebuild, buy elsewhere, or sell the lot as-is.
What Counts As A Total Loss
A home is usually a total loss when it's destroyed. It also counts when repairs would cost about as much as rebuilding. Your insurance company makes this call after its inspection. If you disagree, you can get your own contractor's estimate and ask your adjuster to review it.
How Total Loss Payouts Work In Texas
Your payout depends on your policy. Most homeowners policies have separate limits for:
- The dwelling: the house itself
- Other structures: like a detached garage or fence
- Personal property: your belongings
- Additional living expenses: the extra cost of living elsewhere
Replacement cost policies often pay part now and the rest after you rebuild or replace. Ask your adjuster for every limit and deadline in writing.
Contact the Texas Department of Insurance at 1-800-252-3439 to confirm how total loss rules apply to your policy.
Rebuild, Buy Elsewhere, Or Sell The Lot
- Rebuild on the same lot. This takes the longest, but you keep your location.
- Buy another home. Some policies let you use the dwelling payout toward a different home. Ask your adjuster.
- Sell the lot as-is. Buyers purchase burned homes and lots for cash. See your options for a fire-damaged home.
Use our property value estimator to compare.
Mortgage And Lender Issues
If you have a mortgage, your lender is usually named on the insurance check for the house. The lender may hold the money and release it in stages as you rebuild. Keep paying your mortgage, and call your lender early. Many lenders offer help after a disaster.
Debris Removal And Demolition
A burned home usually has to come down before you can rebuild. Most policies include some money for debris removal. Demolition needs a permit, and older homes may need an asbestos check first.
Contact the Houston Permitting Center to confirm demolition permit steps and any asbestos requirements.
See every option for your lot
Answer a few questions and we'll lay out rebuilding, buying elsewhere and selling side by side.
Common Questions
Do I still have to pay my mortgage after a total loss?
Yes. Keep paying and call your lender. The insurance payout for the house usually goes toward rebuilding or paying off the loan.
Can I sell a house that burned down?
Yes. Many buyers purchase burned homes and lots as-is for cash. Tell buyers about the fire.