How to Run Out of Policy Funds Before Your House Is Done

1. Know What Your Policy Covers — Right Now

Your insurance policy is a contract that clearly states what your insurer will — and won't — pay for. If you don't take time to learn how it works, you could be blindsided by costly surprises later. Don't wait for bad news. Read your policy now. This is your responsibility — and your best defense.

2. You Decide, Not Your Insurance Adjuster

By law, your insurance company cannot "steer" you to their preferred vendors. They can ask if you'd like help or if they can send someone — but you are not required to say yes. At Coast Construction, we encourage our customers to stay in control and make their own hiring decisions. Letting the insurer dictate who to hire — and then getting upset when things go sideways — is not a strategy. Take charge early.

3. Services Your Reconstruction Contractor Does Not Provide

Coast Construction does not provide contents inventory, contents cleaning or storage, mitigation services, or abatement services. These are handled by separate specialty companies. Why does this matter?

Some adjusters push their preferred vendors on you by acting like you must use them. You don't. And if you're not careful, these vendors may charge excessive fees, burning through your policy funds and leaving you short when it matters most.

4. Contents Inventory — Be Cautious

One of the most dangerous traps we've seen: An adjuster brought in a contents inventory company before the homeowner understood what was happening. That vendor priced luxury items at Walmart-level values when the customer was in a wealthy neighborhood and had luxury-grade items. The customer spent a year fighting for fair compensation, getting both less than the items' true value and less than policy limits allowed.

• Be present and involved in inventorying every item.
• Don't throw anything away without documenting it first.
• If you'd like vendor suggestions, Coast can refer companies that other clients have been happy with. We do not accept referral fees for doing so.

5. Mitigation Work — Ask the Right Questions

Some mitigation companies charge to "restore" or "clean" areas that will be torn out anyway during reconstruction. Why pay for someone to dry and clean a wall that is going to be demolished? You need to ask: "What exactly are you doing, and why does it need to be done now?"

If work is being proposed on areas that are likely to be demolished, that is a conversation to have with your reconstruction contractor before authorizing it.

6. Abatement — Watch for Scope Creep

We've seen abatement vendors get approval to "remove lead and asbestos" and then quietly get full interior demolition approved — often without clearly explaining it to the customer. Demolition is valuable work, and reconstruction contractors like Coast are often better and more cost-effective at it than abatement companies.

If you want your reconstruction contractor to do the demolition, tell other vendors and your adjuster up front before they are authorized to do work that overlaps. Demolition is a high-value part of the job, and having it done by the right party at the right time matters for both cost and project sequencing.

7. Alternate Living Expenses (ALE) / Loss of Use

Your policy may cover rent and expenses while your home is being repaired — but usually with limits on total dollars and time, often 12 months. Delays caused by your insurer can erode this benefit significantly.

Adjusters may take a week to do what we can do in a day — and this delay can indicate that questions are being asked about missing scope components that the insurer isn't enthusiastic about paying. This eats through your ALE timeline and budget. If an adjuster delays decisions and we're pushed past your 12-month housing allowance, you are the one who pays the difference.

Coast Construction's contract is clear: our production time starts after permit approval, not after your date of loss.

8. Your Mortgage Company — An Often-Overlooked Complication

If you have a mortgage, your insurance company will co-issue the claim check jointly to you and your mortgage lender. The mortgage company has a legal interest in your property — they want to ensure that the damaged, potentially unsellable property securing their loan is actually repaired. So they hold the funds and release them incrementally as work progresses.

The typical mortgage company draw schedule works like this:

• First release: approximately 25% of funds, upon verification that 25% of work is complete
• Second release: approximately 25% more, upon verification of 50% completion
• Balance: typically released at 75% completion or upon final inspection

Before each release, the mortgage company requires an approved inspector to visit the property and verify the stage of completion. This adds time and coordination to every payment cycle. Inspectors work on their own schedules, not yours or your contractor's.

The practical effect: your contractor has funded and completed work, submitted for payment, and now must wait for the mortgage company's inspector to show up, file a report, and authorize the release — before a check can be cut, cleared, and paid. This cycle repeats multiple times throughout the project.

Mortgage companies are permitted to retain up to 100% of the unpaid loan balance from insurance proceeds, with any overage going to the owner. Their interest is in protecting the asset that secures their loan — not in moving your project forward quickly. The friction in their process is real, and it is not accidental.

Coast Construction has staff who track mortgage company draw schedules, prepare the required documentation, coordinate inspector visits, and work proactively to compress delays. This is one of the less-visible but most practically important things we do on larger projects. If your project involves a mortgage, ask us about this process before construction begins.