Homeowners insurance exists so that if anything were to happen, from fires to vandalism. With any luck, we at Hensley Insurance hope that your filed claims are few and far between, but sometimes, they’re necessary, and when they are, we’re here to help.
If it’s your first time filing a claim, then it helps to have a good sense of what you to expect from the process.
How Insurance Claims Start
The claims process typically begins with an adjuster. This person will come to the house and inspect the damage, and then calculate how much the provider will offer for all necessary repairs, based on your policy. This is just the beginning of the process, not the end, so if you accept this payment, and other issues arise, you can reopen the claim later and file for an additional amount. You’ll have a year from the date of the disaster to file, or follow-up, with a claim. So it’s typically fine to accept this first payment. Think of it like an advance.
There May Be More Than One Check
Basically, for each type of coverage, expect a corresponding check, and not just one big one. If your house is damaged, your belongings ruined, and you have to find shelter elsewhere while repairs are happening, then expect three checks, one for each respective issue. Any other types of coverage – such as flood or hurricane – will also likely result in an additional check.
Lenders Will Probably Be Involved
For mortgages, expect the lender to also be involved in the payment. Chances are the check will also be made out to the both of you. Most mortgages aren’t granted unless the lender is also named in the policy and that they are included in the payments related to the structure of the home. Since the lender basically paid for your home, and you’re just paying them back through the mortgage process, they certainly have a financial interest in the house.
They’ll want to ensure that all repairs are made, and made well. You’ll need them to endorse the check before you can cash it and get to work on the repairs.
The lender may also involve themselves with the contractors, too. If this happens, they’ll likely put that money in escrow, and then once the contractor has completed the repairs, the lender will send someone to inspect the work, verify that it’s done, and done well, and then the payment will be released from escrow.
If the house is completely destroyed, then who gets what amount of the settlement is determined by your policy. With the best policy, a portion of the settlement will cover any remaining mortgage costs, and then you’ll receive what’s left to do with as you please. You can either rebuild the home at the same spot, somewhere else, or not rebuild at all.
Be Wary of Contractors Requesting a “Direction to Pay”
Your contractor may request that the insurance company pay them directly through a legal document referred to as a “Direction to Pay.” Take extra care in reading this document and ensure that you are not signing over your entire claim to the contractor. This would give them control of the entire process. If in doubt, give the friendly agents here at Hensley Insurance, a call before you sign. We’ll give you our recommendation and ensure that you aren’t being swindled.
This is just a basic overview of the claims process, but if you have any questions about the claims process Hensley Insurance is here to help! Just give us a call at 316-721-1800, or contact us directly.
With any luck, your insurance claims will be few and far between, or never something you have to worry about at all, but accidents do happen. Nature does happen. Even people happen.
