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Tornado victims warn about using insurance to pay mortgage

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MOORE, OK -- In their rush to settle with their insurance company, a Moore couple says they made a costly mistake. Nick and Jenny Wolfes lost their first home as a married couple to the May 20th tornado.

"You could just see the tornado just rip the roof completely over our head. The closet door just was gone," said Nick Wolfes.

When the insurance company made their offer only eight days later, it seemed like a good deal. Their adjuster recommended they pay off their mortgage.

"It wasn't more of a have to, it was kind of presented, like, there wasn't a lot of options besides that," said Jenny Wolfes.

Little did they know, paying off the mortgage effectively ended the claim. And they lost out on what's called additional living expenses, which pay for temporary housing and food while they rebuild.

"We want to make sure consumers do not rush to pay off mortgages till they've thought through all the ramifications of not having a mortgage," said Brandon Lewis, a public adjuster with BenchMark Public Adjusting Group.

Once the Wolfes realized their mistake, they turned to Lewis who advocated on their behalf and convinced the lender to cancel the deal. The couple almost lost on the 3.75% interest rate they'd just secured before their home was destroyed.

"If you were to calculate the difference between what today's rate is and what yesterday's rate was, it would've cost them another $60,000 to get the same mortgage!" said Lewis.

"When we found out that we got our mortgage payoff reversed, it was like this weight had been lifted off us because we don't have to try to start all over again," said Jenny Wolfes.

And the Wolfes now plan to use the insurance money to rebuild what they lost. Lewis says he also believes the amount the insurance company settled on was not fair and he's now working to re-figure the value of all the couple lost.

He says bottom line, homeowners need to know their options and that they can't be forced to use insurance money to pay off the mortgage.