Long Nguyen | author
ICHQ | Site Author
When a disaster strikes, all you need is to get back to the state you were in before the event. Luckily, your insurance company should make this happen as soon as possible.
In most cases, your insurance company will issue you with several checks to replace any belongings that have been damaged or even for permanent and temporary repairs.
In terms of questions about how homeowners insurance claim checks are doled out, do you know how you get paid or even who gets paid in case of a disaster that affects your home? Keep reading to learn how homeowners insurance companies pay out claims.
Home Insurance Claim Payments
Insurance policies exist to assist homeowners in addressing various expenses after a disaster. Knowing how quickly your claims are paid can help you plan yourself well. Usually, the claims processing period varies significantly from one insurer to the other.
Here are a few issues you should know about homeowner claims payment:
You may get an advance payment
An adjuster will visit your property for a damage inspection if an insured risk occurs. After assessing the extent of the damage, they will give you some amount to help you with the repairs. This amount is dependent on your homeowner’s policy limits and terms.
Usually, this first payment is a percentage of your total settlement. However, it is advisable to ensure a thorough inspection of the degree of damage so you get a full amount.
How replacement cost vs. cash value claims are paid
When getting a homeowner policy, you can have your belongings and home covered based on replacement cost or actual cash value. Your decision here impacts your claim payout significantly.
If you opt for the actual cash value, you get compensated based on the depreciated value of your property. On the other hand, you will only get an amount equal to the cost of replacing the damaged property if you consider the replacement cost claim.
Typically, the replacement cost doesn’t come in one lump sum. Your insurer will make an initial payment to help you get by with the repairs and replacement, then pay the rest later. However, it is essential to note that you may need to provide receipts to prove that you replaced the items.
Home insurance claims payment in case of a mortgage
If you have a mortgage, your claims payment process is different. Usually, the insurer will issue you and the lender a check to cater to the house’s structure.
Your insurer will sometimes make partial payments based on the project’s milestones. However, the insurer has to assess the work upon completion. They pay the last bit of the total settlement if it passes inspection. After repairs or rebuilding, the lender signs off the final check.
Talk to a Lawyer About Your Homeowner’s Insurance Claim
Applying for a homeowners claim and getting a settlement is sometimes challenging. You need to know the proper process to follow for easy claim settlement. Engaging a reputable lawyer could increase your chances of getting your rightful compensation in time. The lawyers at Insurance Claim HQ will use every option at our disposal to seek a positive outcome for you. Contact us today to schedule a consultation.