Our house and 99% of my family's personal contents were destroyed by a fire. I received a check from the insurance company for the "actual cash value" (replacement cost less depreciation) of items lost in the fire and In order to recover depreciation (50 -90% of the total value in many instances), I need to buy the items, obtain a receipt, and then submit it to the insurance company. This needs to occur before I will receive the replacement cost coverage I paid in the form of monthly premiums for 17+ years.
I can understand a receipt specifically identifies the market value or replacement cost of items lost in the fire and serves as the limit of their obligation. Does the law prohibit me from returning or selling the replacement items after I've obtained the item and forwarded the receipt to the insurance company? Or is this considered insurance fraud because I bought items to generate receipts, solely for the purpose of allowing me to be fully compensated by the insurance company for my destroyed personal items? BTW, the insurance policy makes no mention of what can or can't be done with items after purchase. Only thing that IS clear to me is if I don't buy $1,000 worth of unneeded baby clothes (our kids are now teenagers) and fail to present a receipt for that amount, I'll only get the arbitrarily chosen depreciated amount of $75. I'd like to take $ from unneeded personal items and put that money into the house. I can see the possibility of a potential tax liability here, but not criminal insurance fraud. What am I missing here?