How Your Homeowners Insurance Company May Pay Your Claim

Multiple Checks

You may receive multiple checks from the insurance company, depending on your loss. Consider serious home damage that:

• Damages your home’s structure
• Damages your personal belongings
• Requires you to vacate the home for some time

In such a case, you may receive a separate check for:

• The structural damage
• Content damage
• Additional living expenses (ALE)

In short, you may receive a separate check for each category of loss that your policy covers.

Multiple Payees

Your policy and homeownership structure determines who gets your insurance payouts. In some cases, you might have multiple payees for the same claim. Below are some of the possible payees.

The Homeowner

As the homeowner, you may be the sole payee for the checks. This form of payment is especially true for ALE payments and content damage compensation. You may also receive the structural damage compensation directly, depending on your insurance policy.

The Homeowners

Home insurance compensation compensates everyone with insurable interest on a damaged property. Thus, the check will have both or all of your names if you co-own the property with another party. For example, if you bought the house with your parents, the compensation check will have all your names.

In fact, many HOA insurance policies can offer valuable protection. HOA insurance complements your homeowners or condo insurance to provide comprehensive coverage. The HOA master insurance policy would assist in covering the legal, medical, and repair costs incurred as a result of the accident. This alleviates the burden on residents. At the same time, it’s critical to learn about your HOA’s board of directors. Because there are times when the HOA is unsupportive, and you know it’s time to elect a new board. In addition, when discussing elections, it is important to note that under the Davis Stirling Act in California, HOA management companies may no longer act as Inspectors of Elections for the HOAs they serve. Inspectors of Elections must be impartial third parties who are not “a person, business entity, or subdivision of a business entity who is currently employed or under contract to the association.” As a result, it is preferable to hire an election company to handle the ballot counting so that there are no frauds entertained.

Homeowner and Mortgage Company

Mortgage companies require homeowners insurance to protect their interests. Many lenders even insist on their names being in home insurance policies. The insurance company will include the lender’s name and your name on the money meant for repairs in such a case. Your agreement with the mortgage company then determines how you can cash the check. Homeowners may come across services like jumbo mortgage wholesale lenders when they apply, so it is important they look into how this may factor into their home buying process or discuss with their mortgage broker about what this can mean.

A mortgage broker can potentially obtain more favorable interest rates than you probably would if you go directly to a mortgage lender. This is because if you go straight to a lender without first seeking professional advice, you may only have access to their products and may miss out on a better deal available elsewhere. Besides, some mortgage advisors, such as those found on websites similar to certifiedmortgagebroker.com, may negotiate a better deal than you could get with a specific lender and might have access to broker-exclusive deals.

The Building Contractor

The contractor’s name can be on the compensation check via two main routes. First, the contractor’s name may be on the check if you are still servicing your mortgage. The arrangement makes sense since some lenders require an approved contractor to get their pay directly from the home insurance company.



Secondly, some contractors wish to receive their pay directly from the insurance company and not the homeowner. In such a case, your contractor may ask you to sign a form that transfers the insurance company’s payment obligations from you to the contractor.

The Coop or Management Company

If you are part of a coop or condominium, then the relevant management company may also have their name on the check. Such an arrangement is common with damages that affect parts of your house under the management company’s control.

Staggered Payments