You become a homeowner the moment you sign the last document at your closing. However, until you make the final mortgage payment, your lender retains a significant interest in your property. Our Fort Lauderdale insurance claim law firm receives many calls from claimants who do not understand why a lender’s name on their claim settlement checks prevents them from gaining access to the money they need to pay for repairs and other losses.
Settlement Checks are Written According to Policy Language
According to Citizens Property Insurance Corporation, the Mortgage Clause provision of property insurance policies may require the inclusion of a mortgage company or lienholder as a payee on claim settlement checks. In some cases, you might not even recognize one or more names on your check.
Before you experience any type of property loss, it is important to review the Mortgage Clause so you know what to expect, while avoiding unnecessary delays such as the following:
• The need to contact other payees and undergo a potentially-lengthy process to obtain all endorsements you need before you are able to cash your check
• Discovering that information (such as names or addresses) about you, the mortgage company or the lienholder is incorrect, requiring coordination and correction — and possibly re-issuance of the check
• Not receiving the settlement check — only to learn that the insurance company delivered it to another payee on the check
Talk to All Interested Parties Before a Loss to Help Avoid Payment Delays
After sustaining a major property loss, you do not need the additional stress of performing major research or fighting your own lender for insurance proceeds. The building contractors or other vendors you turn to expect prompt payment for their goods or services. When things go wrong, you may be faced with lengthy and costly work stoppages simply because you do not know how to get the endorsements you need.
A careful review of the Mortgage Clause in your policy is the first step in ensuring that all information is correct. However, you should also get in touch with all potential payees (lenders, public adjusters, contractors, lawyers) to learn what you will need to obtain quick endorsement of the check in the event of a loss.
Make sure you also maintain accurate contact information accessible in your smart phone or other places you can easily access in the event that a major loss prevents access to your physical policy or files.
If you have done all your research up front and have phone numbers handy in the event of endorsement or other issues, that can go a long way toward protecting your interest in timely receiving claim payments.
Still, if you have any suspicion that your claim is not being handled fairly and efficiently — or if another payee received and managed to cash your check — it may be time to seek advice from an experienced property insurance claims lawyer. Call us at (954) 928-9568 or use our convenient online contact form so we can assess your legal needs.