What do you do with the money left over from a home insurance claim?


How do insurance companies pay claims?

In many cases, people who live in houses are not the only owners, especially if they are renting or paying a mortgage. In this case, the insurance payment may not go to them but rather to their mortgage lender, landlord, or some other entity. Read on to find out who receives the insurance claim based on the type of property.

For owners

Homeowners are more likely to receive insurance payment directly since they own the property, however, this is not always the case. Be sure to read the insurance company’s policies to verify. In this scenario, it is the homeowner’s responsibility to pay for the repairs along with the home insurance claim payment.

For mortgage lenders

Those with a mortgage will have their insurance payment sent to the mortgage lender. Often times, a homeowner with a mortgage would have to work with the company they are mortgaging with to secure payment. They may even ask to oversee repairs or hire a contractor themselves.

For property management companies

Home insurance claims for an apartment or condo are often made to the association or property management company that holds the rights to the property. This forces homeowners to seek payment from the property management company and eventually get their approval for repairs.

For entrepreneurs

In some cases, insurance companies will pay the contractor directly, not the owner. If an insurer works with their own network of repair professionals, or if the claim goes to a general contractor on behalf of the owner, it is more likely that the money will go directly to those who repair the house and not to the owner.

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