When you raise a home insurance claim, the insurance provider may pay out your settlement as a lump sum or in smaller amounts at different stages to different parties. Understanding how the insurer processes and pays out claims can help avoid any confusion. Here’s a look at how home insurance providers usually deal with claims.
Who Receives the Claim Payout?
The insurance company may write a check to different people when a claim is raised. Here’s who may get a check from the insurer:
The Homeowner: If you are the sole owner of your home and property, you may receive a check from the insurance company.
The Mortgage Lender: If your home was purchased on a mortgage, the insurance company may write a check to you and the mortgage lender, meaning you will need to work with the mortgage company to cash out your check. Mortgage companies may have certain rules regarding how the claim amount may be used or paid out, so make sure to check with your lender.
The Contractor: Certain contractors may need you to sign a document that will allow the insurance provider to directly pay out the claim to them. In this case, you will not be involved in the claim process, but you will have to ensure that your property has been restored to your satisfaction before the final claim payout is made to the contractor.
The Named Insured: The insurance provider may also offer the claim payment to the individual who is the named insured on the home insurance policy.
The Condominium or Co-Operative Apartment Management Company: If you have a condominium or co-op insurance, the payout may be made to the management company directly.
How Payouts Are Made
Typically, the first check you receive from your insurance provider will not cover the entire claim amount. It is usually offered as an advance against the total claim amount. Further, if the structure of your property and your personal assets has been damaged, it is likely that you may receive multiple checks from the insurance company.
The best way to ensure you receive your payouts on time is to provide all the required documentation to the insurer and follow up regularly.