Hayden Haskins | author
ICHQ | Site Author
In property casualty law, there is a lot of talk of getting your insurance check not only awarded, but awarded in full. While getting your insurer to hold up their end of the deal is an important goal, the reality is that the story doesn’t end at the issuing of insurance funds. Much like the claims process itself, an insurance check goes on a journey. Fortunately, there are methods through which you can prevent this process from being drawn out. In order to understand the crux of the issue, let’s first discuss the involvement of your mortgage company.In short, when an insurance check is issued, it’s made out to both you and your mortgage lender. Your mortgage company has a stake in your property, so they are effectively entitled to be a part of the claims process. The security of your home in the event of an emergency is crucial, but the bank always wants to ensure that its loan is protected. Basically, the lender wants to make sure that you’re actively working on repairs of the collateral before they simply hand over a good deal of money. Not to point fingers that you would, but if a homeowner took the money and ran, the bank would not only have a foreclosed home, but a damaged one at that. After you endorse the check, it is deposited into your lender’s account where the money is held. Once you can prove that the ball is rolling on repairs, single or partial payments will begin to be released. So, being able to repair your home after a crisis has a direct dependence on your mortgage lender.
Having to wait on another bureaucracy to restore your household to normalcy can be extremely frustrating, particularly if you do not have much money to front on repairs in the interim. While contractors may be accustomed to having to wait on the release of insurance funds, they still may require a partial payment in the meantime. By saving receipts and invoices, you can demonstrate to your lender that you are, indeed, actively trying to repair the collateral. Involving an attorney can be handy in expediting this process, as the threat of a lawsuit will deter your mortgage company from trying to withhold all payments until your home is fully repaired. Otherwise, a bad faith claim could be made.
After considering these factors, you may fear having your insurance funds being handed over to a party to whom you owe money. If you act upon legal protections, you shouldn’t be. As a homeowner, you can also make a claim if your mortgage company tries to usurp the funds to pay out your mortgage without consulting with you first. However, these restrictions don’t mean that vigilance over how funds are being apportioned isn’t necessary.
The loss unit in mortgage companies can be hard to navigate. The overarching issue is that the process is extremely slow. History has shown that this department does not act on releasing funds for repair bills or amounts in excess of the loan unless you advocate for yourself. Generally, this process takes a lot of following-up to get moves made, which, of course, involves time spent on phone calls, writing emails, and logging conversations. Very few homeowners have that kind of time on their hands. So, consider hiring a legal advocate to attend to your lender on your behalf. For attorneys, spearheading this process is their full-time job, leaving more time for you to attend to yours, your family, and the pragmatic recovery of your home.