How Does My Insurance Claim Get Paid?
Friday, August 16, 2013 at 08:53AM 
The whole insurance claim process can be confusing. Its true that your insurance company approves the scope of the repairs and provides the claim funds. But your contractor (not the insurance company) is responsible for performing satisfactory repairs, and you the homeowner (not the insurance company) are ultimately responsible to make sure that your contractor gets paid.
A common question people have is 'what do I do with my deductible?' Your insurance company will 'deduct' your insurance deductible from the total claim funds that they pay. If you have a total claim of $10,000.00 and your deductible is $1,000.00, your insurance company will pay $9,000.00 and your $1,000.00 deductible is to be paid by you directly to your contractor. Your contractor will expect your deductible to be paid at the beginning of the project.
Another common question is 'why did the insurance company put my mortgage holder on my claim check?' We all jokingly say that the 'bank owns our house', but there really is truth to that statement isn't there? Your mortgage holder has a definite interest in the condition of your home, so you insurance company can be required to include your mortgage holder on the claim check if you have a mortgage and if your claim reaches a certain dollar amount. Oftentimes this claim threshold for including the mortgage company is $10,000.00 but can be as low as $5,000.00.
Your role as the homeowner is vital in expediting the process of contacting your mortgage holder and getting them to endorse the claim check promptly. They will have documents that need to be completed by both you and your contractor. They will need the scope of repairs and claim check sent to them. Oftentimes they will order a brief visual inspection of the repairs to make sure the work was completed before they sign off on any check.
It can be extremely frustrating for a contractor to have completed the repairs, and then have to wait for weeks to get paid while the mortgage company holds on to the check. Your role is vital in getting your contractor paid at substantial completion of the repairs. And if you choose a reputable restoration contractor that offers a warranty for their services, you won't have to worry about whether they will come back to address any concerns you may have about the repairs.
Greg Ahlstrom - Accounting Manager
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