I designed a replacement building for a University after the original building burned to the ground. The discussions with the insurance company were completely separate from the design and construction process. The University hired a cost estimator to evaluate the loss and negotiated for temporary facilities and for replacement cost with the insurance company.
The building I designed was much larger and more sophisticated than the one lost by fire. The University had to pay the difference. They were glad to do so because the new building served their current needs better than the old one.
The salient fact is that my contract was with the University. They decided how to spend the insurance money and how to replace the lost building. The insurance company argued about the value of the building lost, but had nothing to say about our new building or my design fee.
I think this was the correct process. I hope you can get your agreement with the owner clear and separate from the insurance coverage.
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Gail Pelsue AIA
Principal
Pelsue Architecture, LLC
Denver CO
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