What rights does a homeowner have when a mortgage company refuses to release an insurance check to the homeowner for hail damage?
Free Insurance Quote Comparison
Secured with SHA-256 Encryption
UPDATED: Apr 18, 2012
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.
Insurance Question from Kingston Springs, TN
Asked on 04/18/2012
What rights does a homeowner have when a mortgage company refuses to release an insurance check to the homeowner for hail damage? We had major hail damage on March 2. Our insurance company issued us a check for roughly 1/2 the damages. The check was, also, issued to the mortgage company who refuses to sign a release to us. We cannot make the necessary repairs without this money. I HAVE the check. Can I take the check make to the insurance company and have them issue checks directly to the companies scheduled to make the repairs?
Answer given on April 21, 2012
When the insurance company issues a claim check for repairs to the home, they must include the mortgage company on the check if it is made payable to the homeowner. The mortgage company may be concerned that if they sign the check then you won’t make the repairs to the home. It is unlikely the mortgage company will be willing to issue checks to the contractor as the work progresses.If you have a contractor signed up to do the repairs you can ask the insurance ocmpany to reissue the check to the contractor. The amount they are issuing at this time is probably the actual cash value of the damages, and will pay the full replacement cost once the repairs are made. Again, at that time you should ask them to make the check payable to the contractor. The contractor should have no problem with this arrangement, nor should the insurance company.
IMPORTANT NOTICE: These answers are for general information purposes only and are provided by the person answering and FreeAdvice.com AS IS. It has not necessarily been reviewed by the management staff of FreeAdvice.com nor is it binding any insurance agent, broker, or other insurance professional or any attorney or insurance company. Insurance laws, regulations and practices vary from state to state and insurance policies and practices differ from company to company, by type of policy, by state and locality and by type of insurance. Tiny variations in the facts, policy language or a detail not set forth in a question often can change the outcome or a professional's conclusion. Although FreeAdvice.com has confirmed that the answer(s) was/were provided for the account of an experienced insurance professional, that professional may not be licensed in the state referred to in the question, and may not be experienced or up to date in the subject area. Unlike the answers provided here, upon which you should NOT rely, for personal advice you can rely upon we suggest you consult a licensed insurance professional in your area or retain a licensed attorney listed on AttorneyPages.com to represent you.