Why Is My Mortgage Company Listed On My Insurance Claim Check?

3/6/2020 (Permalink)

SERVPRO of Bear/New Castle Professionals are uniquely qualified to keep claims costs down while still providing the best services possible.

When you have a mortgage on a home, your mortgage company has a substantial interest in your property. Your mortgage holder requires you to carry insurance on the property and will be listed on your homeowner’s insurance policy as the lienholder. When you file an insurance claim due to fire, water, flood or mold damage to your home, your insurance company may issue a check for restoration and repairs that is made payable to you, your mortgage company and in some cases the contractor. You’ll need the cooperation of your mortgage company in order to receive the required endorsement to have the funds released as well as the contractor.

The Insurance Check

Some insurance companies will list everyone who has a financial interest in the property on their checks. Whether it be a spouse, mortgage company, home equity loan company or contractor, your bank will require an endorsement by all parties listed.  This is standard industry practice.

Escrow Account

Your mortgage company may deposit the funds into an escrow account. Funds will then be distributed in increments to cover the cost of repairs. The mortgage company will not release the total payout until the repairs are 100% completed and an inspection of the damage has been provided. You’ll need to cooperation with your mortgage company by providing the necessary documents and scheduling an inspection if required.

Getting the Money You Need

In order to get funds released to cover the initial deposit required by most contractors, your mortgage company will typically require you to submit a request and provided the contractor’s estimate.

Your mortgage company will issue a disbursement check to cover the contractor’s initial deposit so you can get repairs underway. Upon completion of the repairs, the mortgage holder will distribute the remaining funds. Your mortgage company may require an inspection to verify that the work has been completed properly and in compliance with local residential building codes, before issuing the final disbursement check.

Structure vs. Personal Property

Your mortgage company only has an interest in the physical structure of your home. It’s possible that the same event that damaged the structure also damaged your personal property, such as your furniture and electronics. Your insurance company may issue a separate check made payable to only you to cover the cost of restoring and or replacing your personal property. Some insurance companies will issue one check for total damages made payable to you and your mortgage company. In this case, you should request that your mortgage company issue you a check for 100% of the settlement amount for personal property.

Why Choose SERVPRO of Bear/New Castle?

As a leader in fire and water cleanup and restoration, SERVPRO of Bear/New Castle offers an array of competitive advantages. Our goal is to restore both your property and peace of mind through timely mitigation and adherence to IICRC standards. The result? Lower claim costs and satisfied customers.