7 Homeowners’ Insurance Claim Check Questions (+ Answers!) & What You Need to Know

Understanding the homeowners’ insurance claim process and the coverage in your policies is crucial to avoid losing your coverage, paying more out of pocket, or worse. Below, we’ll delve into the claims process and guide you on handling the insurance check if it’s sent directly to you. 

Frequently Asked Homeowners’ Insurance Claim Check Questions

The homeowners' insurance claim process can be confusing, especially when it comes to understanding the specifics of the claim check you may receive. 

1. What’s involved in the homeowners’ insurance claim process?

The insurance claim process begins when you contact your insurance company to report damage to your property. This could be due to a storm, fire, flood, or another covered event. Once you’ve reported the incident, your insurance company will send an adjuster to assess the damage.

The adjuster’s role is to inspect your home, ask questions about the incident, and gather all necessary information to determine the extent of the damage. They may take photos, measurements, and notes to document everything. 

Once the adjuster has gathered all the necessary information, they'll provide you and the insurance company with an estimate of the repair costs for your home. Once your insurance company approves the claim, you can proceed with hiring a contractor to restore your home. The insurance company will either pay the contractor directly or send you a check, giving you control over the repair process.

2. Who should receive the check for a homeowners’ insurance claim?

In many cases, the insurance claim check is issued directly to the homeowner. However, if you have a mortgage on your home, the check may be made out to both you and your mortgage lender. This is because the mortgage company has a vested interest in ensuring that the repairs are made to protect the value of your property.

When the check is made out to both you and your mortgage lender, you’ll typically need to endorse the check and send it to the lender. The lender may then place the funds in an escrow account, releasing the money in increments as the repairs are completed. They do this to ensure that the repairs are done properly and that the funds are used for their intended purpose.

In rare cases, the check may be issued to both you and your contractor. If this happens, you will need to work with the contractor to endorse and deposit the check.

3. Can my mortgage company keep my insurance claim check?

Your mortgage company cannot keep your insurance claim check indefinitely. However, they do have the right to hold the funds until they are satisfied that the necessary repairs have been made. This process is designed to protect both you and your lender by ensuring that your property is restored to its pre-loss condition and maintains value.

Your lender may require inspections at different stages of the repair process before releasing additional funds. Once all the repairs are completed and verified, the remaining funds should be released to you. 

4. Can I cash a homeowners’ insurance claim check?

Whether or not you can cash an insurance claim check depends on how, and to whom, the check is issued. 

• If the check is made out solely to you, you should be able to cash or deposit it at your bank.
• If the check is made out to both you and your mortgage lender, you’ll need to follow the procedures set by the lender.
• If the check is made out to both you and your contractor, you’ll need to work closely with your contractor to endorse the check, cash it, and disseminate funds appropriately.

Regardless of how your check is issued, it’s important to handle the money responsibly, as it’s intended for specific repairs covered by your insurance policy.

5. Why did my insurance company send multiple claim checks?

Receiving multiple claims checks from your insurance company isn’t uncommon. There are two reasons this happens.

One common scenario is if your insurance company issues an initial check for immediate repair needs, such as emergency services or temporary fixes. Then, once the full scope of the damage is assessed, your insurance company may issue additional checks to cover the remaining repair costs.

Another reason could be that your insurance company is distributing funds in stages, especially if the repairs are extensive. Staged disbursement ensures that the repairs are completed as planned and that the funds are used appropriately.

6. What should I do if my insurance claim check is less than the damage?

If your insurance claim check is less than the estimated repair costs, it’s essential to act quickly. Do NOT just accept the first offer, or you’ll unfairly have to cover the rest of the costs yourself.

The first step is to review the adjuster’s report and the estimate provided by your contractor. Sometimes, discrepancies arise due to overlooked damage or differences in repair cost estimates.

From there, contact your insurance company to discuss the shortfall and provide any additional documentation that supports your request for higher compensation. In some cases, the insurance company may adjust the payment to cover the additional costs. 

If you’re still unable to resolve the issue, consider consulting with a public adjuster or an insurance claims attorney to help you negotiate a fair settlement.

7. What should I do if my insurance claim check is more than the damage?

If your insurance claim check exceeds the cost of repairs, you must handle the excess funds carefully. 

First, double-check that all necessary repairs are completed to your satisfaction. Afterward, you should inform your insurance company about the excess funds. The insurance company may request that you return the unused portion of the check, as the payment is intended solely to cover the repair costs associated with the claim.

Failing to report or return excess funds could lead to complications with future claims or even accusations of insurance fraud. It’s important to be transparent with your insurance company in these situations to avoid potential financial or legal issues.

Trust the Process with The Lane Law Firm

After years of defending big insurance companies and helping them squash the “little guys,” Chip Lane decided to open his own firm to serve families and business owners needing help with insurance claims. With his experience and extensive knowledge of the insurance companies’ tactics, he’s able to level the playing field and get claims approved. 

If you’re struggling to get the full payout amount you're owed or have questions regarding the insurance claim process, please don’t hesitate to reach out; we’re here to help.