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Homeowners Insurance Claims Settlement

The final process in the home insurance claims process is the settlement and there are a number of guidelines you should follow to receive a fair settlement.

If both your home and personal belongings are damaged you will receive two separate checks. You will also receive a separate check for additional living expenses if your home is unlivable while repairs are taking place.

If your home is mortgaged, the check for home repairs will generally be made out to you and the mortgage lender. As a condition of granting a mortgage, lenders usually require that they are named in the homeowner's policy and that they are a party to any insurance payments related to the structure. The lender gets equal rights to the insurance check to ensure that the necessary repairs are made to the property in which it has a significant financial interest.

This means that the mortgage company or bank will have to endorse the check. Lenders generally put the money in an escrow account and pay for the repairs as the work is completed. You should show the mortgage lender your contractor's bid and let them know how much the contractor wants up front to start the job. Your mortgage company may want to inspect the finished job before releasing the funds for payment.

Review your homeowners insurance policy to see if you have replacement cost or actual cash value for property damage. If you have a replacement cost policy for your possessions you normally need to replace the damaged items before your company will pay the replacement cost.

If you do not agree with the settlement that you insurance company has provided contact them directly and explain your side of the issue and include supporting documentation. You can also contact your state insurance department to discuss the settlement disagreement. A state insurance department representative will contact the insurance company and try to resolve the situation on your behalf. Your final resort is to contact an attorney and provide them with your insurance policy and any other documentation. Remember that once you have consulted an attorney, the adjuster, your insurance company and your agent will only be able to communicate with the lawyer.

Sources Cited:
Insurance Information Institute
Insure.com
Nevada Division of Insurance

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