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Personal Perspective


By April 1, 2012No Comments

An insurance adjuster is responsible for inspecting damage to a home following a claim. These individuals are also responsible for offering a specific sum of money that is to be used by the policyholder for necessary repairs. As a general rule, the first check received from the insurance company is meant as an advance toward the total amount of the settlement. It’s important to remember that it’s not the final payment. Separate checks are issued for each category of damage. Checks to cover living expenses are usually also sent separately. Individuals who are offered a settlement amount on the spot might choose to accept the money. If further damage is identified later, it’s possible to reopen the claim to request more money. Keep in mind that most policies require all claims to be filed within one year of the disaster’s occurrence. It’s best to check with one of our agents to learn about rules pertaining to individual state insurance departments.

People who have mortgages on their homes will receive a check for repairs that is payable to them and their lenders. This is because lenders usually require that their names be placed on the Homeowners policy, which means they’ll also be named on any checks for claims. Since the lender has a vested interest in the property for as long as it’s under a mortgage, they have equal rights to the checks issued by Homeowners insurance companies. When a lender’s name is on the check, the document must be endorsed by the lender before it can be cashed. As a general rule, lenders place the funds in an escrow account. They use the money to pay for the repairs until the work is completed. Borrowers must communicate with their lenders to ensure the repairs are done quickly and efficiently. After receiving a bid from a contractor, show it to the lender. Let them know how much money the contractor requires up front to start working. Keep in mind that a lender might want to have the work inspected before releasing enough funds to pay the rest of the bill.

There are some construction companies that require customers to sign a form that permits their Homeowners insurance company to pay the company directly. If this is the case, it’s important to be sure the final work product is acceptable before telling the insurance company to complete the final payment. There are specific guidelines that lenders must follow after a disaster occurs. To learn about these rules, contact our office.

The first step to take after a disaster occurs is to total up the cost of all personal belongings. Use photos, videos and any other means necessary to prove ownership or show the condition of items that were destroyed. If there are receipts or sales records of any items, be sure to save them. Homeowners who have a replacement cost policy will receive reimbursement for the purchase of new items. Cash value policies provide reimbursement minus the cost of depreciation. Most companies require policyholders to purchase new items before they offer reimbursement for the destroyed items.

Checks for additional living expenses are made payable to the policyholder. Since the lender has nothing to do with these expenses, they don’t receive any of the money. Those whose homes have been destroyed have several options. They may rebuild on the same site. If this option is chosen, the amount of money awarded to rebuild will depend on the type of policy purchased and the amount specified under the declarations section. Some homeowners might decide to rebuild elsewhere. If this option is chosen, the amount awarded will be determined by state law, policy provisions and court rulings. If you are considering either option, contact us before making a decision.