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 Posted: Thu Aug 26, 2010 3:28 am Post subject: Claim on home owners Insurance |
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I had some damage to my house. My fridge busted a water line and flooded my basement and ruined my hardwood floors in the kitchen dining room and hallway. It also ruined a lot of my personal items. Now my question is I am behind on my loan will the insurance write the check to me and the bank or just me? I need to replace my items and fix the house but I am afraid that if I have to send the check to the morgage company ti sign off on it than they will keep the check and then this house is going to just ruin as I dont have the money to fix it. If anyone knows what I should do or what will happen please let me know. Thanks
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| Posted: Thu Aug 26, 2010 7:05 am Post subject: |
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A claim check could be made payable to the lender and you jointly. The lender should not use the claim proceeds toward your loan obligation, but allow you to use the money as intended to pay for repairs and replacement of your property.
You can talk to both the insurance company and the lender to determine in advance how things will play out.
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MaxHerr
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| Posted: Thu Aug 26, 2010 7:14 am Post subject: |
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Max, I'm just a bit curious to know if you've indeed come across such an instance wherein the lender used the claim proceeds towards the claimant's loan obligation.
I guess it's better that the OP talks it our before sending the check. Has the carrier got anything to do with the OP's falling behind on his loan?
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anonymous00
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| Posted: Thu Aug 26, 2010 7:42 am Post subject: |
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| The mortgage company cannot legally use the check to pay against the loan. The check is going to have the insured's name on it as well. |
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tcope
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| Posted: Thu Aug 26, 2010 7:08 pm Post subject: |
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Also, the contents check will not have the mortgage company listed, only the insured.
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Dasfuk
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| Posted: Thu Aug 26, 2010 8:42 pm Post subject: |
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And if you want to cut them out completely get a contractor and ask your carrier to pay you and the contractor..
Little fyi, I had a pretty severe hail claim to my own home this spring...amount of draft, just under 11k...called my mortage company, they sent me some paper to sign in front of a notary (saying I was making the repairs), sent this back to them along with the draft, and they promptly endorced the draft and sent it back to me...now, I'm not behind, and maybe it's just my lender...don't know...but this is how it worked out in my (personal) claim.
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Lori
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| Posted: Sat Aug 28, 2010 4:43 pm Post subject: |
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| Quote: | | I'm just a bit curious to know if you've indeed come across such an instance wherein the lender used the claim proceeds towards the claimant's loan obligation. |
Sorry for not responding sooner, but for some reason I'm not getting any topic reply notifications the last couple of weeks.
The concept in the law is something known as "conversion". Just as the bank cannot take money from your savings account to pay a check that overdraws your separate checking account (unless, foolishly, you give them permission to do that), they cannot take your insurance claim check and use it for some purpose other than the indemnity it represents.
So, no, I don't know of any lenders who have violated the law and used a jointly-issued insurance claim check for anything other than paying for repairs. Doesn't mean it hasn't happened.
Unlike Lori, I've never had a claim against my homeowner's insurance policies that involved a check written to me and my lender, so I have no direct experience. But her experience was not unlike those of my clients and friends that I've heard about.
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MaxHerr
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| Posted: Sun Aug 29, 2010 12:32 pm Post subject: |
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| Quote: | | Sorry for not responding sooner, but for some reason I'm not getting any topic reply notifications the last couple of weeks |
Me either! Glad to know it's not just me...let me see what I can find out about this!
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Lori
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| Posted: Tue Aug 31, 2010 6:03 pm Post subject: |
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The whole thing is real simple. You pick a local contractor that you know or that somebody you know has used and trusts. Then your contractor will work with the insurance company adjuster to work out a repair estimate.
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Grinshan
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