How Your Homeowners Insurance Claims Are Settled

After submitting your documents to your insurance firm to claim your homeowners insurance proceeds, the firm’s staff will check your documents to make sure you did not miss anything. If your documents pass the initial evaluation, they will give you a date when to call for the proceeds.

Issuance of Checks

Typically, insurance companies will issue separate checks for damages to the house and for damages to your belongings. If you need to live temporarily in a motel, apartment or another facility while the repairs are being done, your insurance firm will also issue you another check for living expenses.

Names in the Checks

If you took out a mortgage loan when you purchased your house, most probably your homeowner’s insurance policy has you and your mortgage lender as policy co-owners. Most mortgage lenders require homeowners insurance policies to be issued to both the mortgage company and the borrower. This will ensure that the interests of the mortgage company are also protected in case of disasters.

Mortgage Lender Participation

Since the check for repairs is issued to both you and the lender, contact your lender about how the homeowners insurance proceeds will be spent. Most mortgage banks put the proceeds in escrow and then pay you or your contractor as the repair work is done.

Since your mortgage lender is involved in the payments of repairs, it is advisable to ask your mortgage lender for their standard operating procedures before hiring a contractor. Your contractor might demand a payment schedule that conflicts with your bank’s procedures. Your mortgage lender might also inspect the progress of the repair work before releasing payments. Most lenders have schedules that show percentages of repair work done and percentages of money to be released.Settlement Disputes

If you believe your insurance firm did not give you a just settlement of your homeowners insurance claim, contact them and add more documentation to prove your case. If your firm refuses to recognize your arguments, contact your state Department of Insurance and submit the necessary complaint documents. Your state insurance division will negotiate with your homeowners insurance firm on your behalf.


This is the part that no homeowner would want to go through. Litigation would incur lots of expenses, require time and effort and cause you a lot of stress. But if you believe that what you will get from the courts is worth the costs and stress of litigation, then ask around for a good lawyer that you can afford and who specializes in homeowners insurance claims. Remember that after your lawyer files a case in court, your insurance company, claims adjuster and your insurance agent can communicate only with your lawyer.