Question

Mr. Johnson prepared a list of everything he has to do the repair his flooded home. Which of the following items are counted toward the cost of repairs when determining substantial damage? What is the dollar amount that should be counted?

Answer 1

Costs that contribute to determining substantial damage for repairs include structural elements, electrical and plumbing systems, and permits. To determine if the damage is substantial, these costs are compared to the home's pre-damage market value, not including cleaning fees or temporary housing costs.

Step-by-step explanation:

When determining substantial damage for a flooded home, certain costs are taken into account. Substantial damage usually occurs when the cost of restoring the home to its pre-damaged condition equals or exceeds 50% of the market value of the structure before the damage occurred.

The items that can be counted toward repair costs typically include structural elements (such as flooring, walls, and ceilings), electrical and plumbing systems, HVAC systems, and permits fee. Costs related to cleaning and disinfecting, as well as temporary housing, are typically not included.

It's crucial to include an accurate assessment of all repair-related expenses to determine if the repairs are substantial. If you do not have all the necessary information to determine the cost, it is advisable to consult with a professional appraiser or a contractor who can provide a detailed estimate. Once calculated, compare this amount to the pre-damage market value of the home to assess if the damage is substantial.