What to Know Before You Accept a Home Insurance Check
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UPDATED: Aug 13, 2020
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Closing out the home insurance claim process by taking the necessary steps to get your home insurance check is always a relief. While it is nice to get your home insurance check, do not rush to the finish line! Before you sign any claim release waivers, make sure your home insurance settlement covers all your damages!
TIP: Being patient is the most important thing throughout the home insurance claim process. Even when the end is in sight, take your time and make sure you are getting the appropriate value to repay your loss.
Before you accept a home insurance settlement from the insurance company, be sure that any amount paid to you in the home insurance check will cover all of your repairs. Go over your losses, read your policy, and make sure the company is paying you appropriately. It is also important to make sure your home insurance check covers any contractor bills. If your contractor is charging more for repairs than your company will pay, ask the insurance adjuster to talk directly with the contractor to determine what the differences are in the two estimates. Try to work out any home insurance settlement or estimate discrepancies before you start repairs. This will ensure that you will have enough money to complete and pay for the damage repairs without running short.
Home Insurance Settlement Checks and your Lender
Depending on the amount of the damage, the insurance company may pay you directly or include your lender as an additional payee on the check (if you have a mortgage on your home). If you find your home insurance check has both you and your lender listed as a payee, contact your lender right away, and ask how to go about getting their endorsement on the check. Brace yourself! The home insurance claims process for each lender can be confusing, requiring forms that your contractor must fill out (W-9, repair affidavits, lien waivers) and depending on the amount of your check, your lender may hold the entire check in a restricted escrow, issuing payment to your contractor only upon completion of the work. This is all done to protect the lender’s financial interest in the property. Once the repairs are completed, the lender will have a home insurance inspection of their own performed to verify completion of the work. Only then will they issue the home insurance check from your restricted escrow to pay the contractors for the repairs.
TIP: Make sure you completely understand the lenders process up front to avoid delays. Ask you contractor to fill out the paper work as soon as possible. Above all, make yourself available on all home inspections. This will ensure timely payments.
If the work is done and it comes under budget for the repairs, you are sent the remainder. The lender cannot keep the proceeds of a settlement to cover your loan balance.
How to File for a Supplemental Home Insurance Check
If, while working through your repairs, your contractor discovers hidden damage that could not be seen during your home insurance inspection, you will need to request a supplemental home insurance check for the additional damage. Notify your insurance adjuster that there was additional damage that was found related to this claim. They may do another home insurance inspection to review the additional damage or they may ask that you have the contractor write up a supplemental estimate for the work. Once the additional information is reviewed and the estimates seem in line, you will be issued a supplemental home insurance check for the additional damage.
If by chance your claim was a home insurance liability claim where you were the injured party or your property was damaged by the homeowner, obtaining a supplemental home insurance check may be a little more involved. Follow the same steps above by letting the insurance company know as soon as possible that you have additional damage or medical bills that need to be considered under the claim. They again may request a home insurance inspection. In the case of injury, they may request additional medical records or copies of the bills.
If you have already accepted the home insurance settlement and provided a signed waiver of release to the insurance company as well as cashed the home insurance settlement check, you may be out of luck. It is imperative to read carefully and understand all the language in any release form before you sign. If you are ever unclear on what you are signing, it is best to seek the advice of an expert attorney that can guide you on whether to sign a release or wait. Never sign a release if you are still under the care of a doctor or still taking medication for your injuries. If your injury should get worst, you have no recourse. If you have questions about your home insurance settlement check, feel like your insurance company is not paying you fair value, or need additional insurance money for repairs or injuries not previously discovered, click here to have an attorney review your case for free.