How Payments for Home Insurance Claims Work

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.

Key Takeaways

  • A home insurance claim check might be made out to different people when making a claim, or it might all go to the homeowner.
  • Each insurance company will have timelines in which you must claim your loss in order to be eligible to make your claim
  • When your claim is finished, you will likely receive a notice that shows the total amount paid and that you accept the claim as closed.

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 might 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 its own procedure, so be sure and find out from yours how it works.
  3. The coop or condominium management company: If you have co-op or condo insurance, then in some situations the check might be made out to the management company.
  4. The contractor.
  5. 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 circumstances, claims checks are made out to people or entities other than you 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.

What Happens When Multiple Claim Checks Need to Be Issued?

If you have a home insurance claim, you may be getting several different checks 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 checks 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 unique. Disaster claims or major claims may be handled differently from those for 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.

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 information 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 checks and expenses to make sure you get paid for everything until your final claim payment is made.

Frequently Asked Questions (FAQs)

How long do you have to file a claim and get paid?

Each insurance company will have a timeline for when you must claim your loss 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 long does an insurance claim take?

Insurance claims can take anywhere from a few days to a few weeks to process. Any complicated situations will extend that timeline, such as errors on the claim or misunderstandings about coverage. Your insurance agent will have a much better idea of how long you can expect your claim to take.

Article Sources

  1. Insurance Information Institute. "Understanding the Insurance Claims Payment Process." Accessed Aug. 24, 2021.