Looking at the picture of the home, it sure as hell doesn't look like a $600,000 home, let alone a $740k home to rebuild ($345,000 insurance payout + $390,000 additional loan + $5,000 payout from city).
He should have been able to rebuild the home with the $345k insurance payout. Keeping in mind that he still owns the land, which is the bulk of his overall home value.
Keep in mind that his "appraisal" took into account home VALUES, based on comparable homes that sold recently in the area. Home value is not at all related to home cost. Since most homes now sit on land that is worth more than the house itself.
That house can easily have been rebuilt for $345k.
As for the police overreach, it does seem like the police took excessive means to apprehend a petty criminal. A 2 day standoff for a shoplifter seems like a huge waste of city resources and taxpayer dollars.
Although, while I agree that the police took excessive measures in this case, this man is not the first person to have property damage as a result of police apprehending a criminal. This happens every day, all across the country. He isn't going to overturn any precedent that has already been set over the past 243 years that our country has operated.
When police damage property during the pursuit of a suspect, the fault falls on the suspect themselves. The criminal caused the police to chase him, the criminal went into the home and held the police off at gunpoint. Therefore the criminal is at fault. This means filing an inusrance claim with your insurance provider and let them duke it out. They will attempt to sue the criminal, or get the criminal's insurance to cover it.
And that is why you have homeowners insurance. For freak stuff like this. You get a payout and the insurance company figures out how make right with the situation. Now if you don't have adequate coverage for your home (which seems to be the case here) then that is the fault of you as the homeowner.