How can I get the excess funds of an insurance claim back from my mortgage company?

UPDATED: May 10, 2011

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How can I get the excess funds of an insurance claim back from my mortgage company?

I have a sinkhole claim which my insurer is paying on. They will pay the company doing foundation stabilization directly, but have issued checks payable to mortgage company and me for cosmetic damage which mtg company is holding in escrow. Once I complete the repairs (hopefully for less than the insurance company estimates), how can I ensure the mtg company sends me any left over funds. They are telling me that they will send excess funds back to insurance company. Insurance company said that they have not had a situation like that before.

Asked on May 10, 2011 under Real Estate Law, Florida


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

There may be no way to make this happen. Technically, the insurer is only liable for paying for the cost of repairs and compensation for any unrepaired damage. If the repairs are made, the insured is not necessarily entitled to any additional money or funds--the insurer is not obligated, for example, to compensate for cosmetic damage that does not impair value in a material way, or to compensate for inconvenience, etc. If the repairs are made, there is no unrepaired damage, etc., then there really isn't any ground for insisting that you receive additional monies. While it is unusual for surplus funds (if any) to be returned to the insurer, it does not appear that doing so is actually improper.

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