How Payments for Home Insurance Claims Work

When you file a home insurance claim, you may receive payment and claim checks in stages. Don't be concerned if you received a payment that did not cover all of your expenses or if you believe you should have received more. Another claim payment could be on the way. Understanding how home insurance claim payments work will help you get the full value of your claim and understand who will be paid for what.

Who Gets the Claim Payment in a Home Insurance Claim?

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

Here's a list of people who might get the claim payment and how to find out who will:

1. The property owner: If you are the sole owner of the property, you will receive the claim check made payable to yourself. This includes your personal belongings at home. More information about home contents and making a list can be found here.
2. The mortgage lender: If you have a mortgage, the claim check may be made payable to both you and the mortgage company. You will need to work with your mortgage company to cash the check. According to the Insurance Information Institute, the lender may deposit the proceeds of your claim into an escrow account and pay for repairs as they are completed. Each mortgage company has its own procedure, so be sure to ask how yours works.
3. The co-op or condominium management company: If you have co-op or condo insurance, the check may be made out to the management company in some cases.
4. The contractor.
5. Any entity or individual named as an 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 issued to people or entities other than you when a third party has a vested interest in ensuring that 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).

What Happens When Multiple Claim Checks Need to Be Issued?

If you file a home insurance claim, you may receive several checks before your claim is resolved. Here are some examples to help you understand your claim payments.

An insurance company may end up issuing multiple checks in response to a single claim. You can better understand what to expect by asking your insurance company questions during the claims process. It's also a good idea to know what you'll need to provide in order to get paid. Each claim is distinct. Disaster or major claims may be handled differently than minor theft or burglary claims. Some policies, such as high-value home insurance, also include more flexible payment options. The only way to find out is to inquire.

How to Get Full Payment for Your Claim ASAP

Staying on top of what the insurance company needs to issue your payment is the best way to get your full payment for your claim as soon as possible. Inquire about the procedures, and follow up on a regular basis to ensure that your adjuster has received all of the necessary information.

When Is a Claim Payment the Final Payment?

When your claim is completed, you will most likely be asked to sign a notice indicating the total amount paid in the claim. This document will state that the claim has been closed and that the final claim payment has been accepted. Until then, keep track of your claims checks and expenses to ensure you are reimbursed for everything until your final claim payment is made.