Waiting For a Check? How Claim Payment Works for Home Insurance

figuring out insurance claims payments
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When you make a home insurance claim, you may receive claim checks and payments in different stages. If you received a payment that doesn't cover all your costs, or you think you should be getting more, don't panic, another claim check might be coming. Understanding how claim payments work for home insurance will help you get the full value of your claim and understand who will be getting paid for what.

Who Gets the Claim Payment in a Home Insurance Claim?

An insurance claim check might be made out to different people when you have a home insurance claim, or it may be made out to you as the owner of the house or named insured on the policy.

Here's a list of people who may get the claim payment and how to know who will get the claim check:

  1. The owner of the property. If you are the homeowner, you will get the claim check payable to yourself if you are the sole owner of the property. This applies for your personal contents in the home. Learn more about home contents and making a list here.
  2. The mortgage company. If you have a mortgage the claim check might be written out to you and the mortgage company. To cash the check you will need to work with your mortgage company. According to the Insurance Information Institute, the lender may put the money from your claim check into an escrow account and pay for the repairs as the work is being done. Each mortgage company has their own procedure so be sure and find out from them how they work.
  1. The Coop or Condominium management company. If you have coop or condo insurance, then in some situations the check might be made out to the management company.
  2. The Contractor
  3. Any entity or person who is a named insured on the policy for the damaged property.

Why Is the Claim Check Made Out to Different People?

Depending on the circumstance, claims checks are made out to other people or entities besides yourself when the third party has an interest in making sure the claims money is used to do the repairs or replacement, or if a third party is the ultimate recipient of the money (for example a contractor).

Insurance companies want to make sure they honor their contractual obligations to mortgage lenders on the policy, so they need to list them as named insureds, which also means they may get building related claim payments.

Examples of Claims Where Multiple Claim Checks Will Be Issued

If you have a home insurance claim, you may be getting several different cheques before your claim is settled. Here are examples to help you understand what to expect for your claims payments.

An insurance company may end up issuing many cheques in one claim. By asking questions to your insurance company during the claims process, you can better understand what to expect. It is also helpful to understand what you will need to provide in order to get paid. Each claim is different, disaster claims or major claims may be handled differently than a small theft or burglary. Some policies, like high value home insurance also offer more flexible payment terms, the only way to know is to ask.

Is There a Deadline to Make a Claim and Get Paid?

Each insurance company will have time lines in which you must claim your loss in order to be eligible to make your claim. Make sure and ask your insurance claims adjuster about this. You don't want to miss deadlines and be out of pocket.

How to Get Full Payment for Your Claim ASAP

The best way to get your full payment for your claim as soon as possible is to stay on top of what the insurance company needs to issue your payment. Ask about the procedures, and follow up regularly to make sure that your adjuster receives all the info and is not missing anything.

When Is a Claim Payment the Final Payment?

When your claim is finished you will likely be signing a notice that shows the total amount paid in the claim. This document will state that the claim is being closed and that you accept the final claim payment. Until you get to that point, keep track of your claims cheques and expenses to make sure you get paid for everything until your final claim payment is made.