Getting Paid By Home Insurance Companies
Partial Payments – Advances. Partial payments and advances are not an obligation of you home insurance company. The practice of advance payment is an industry standard, but is not necessarily a service your insurance company must provide.
Most insurance companies will advance payment for living expenses and emergency repairs before you are able to obtain receipts. Remember that any advance payment or partial payment will be deducted form your final settlement.
Your Mortgage Company Is On The Check
Most homeowners have a mortgage on their home. All of the standard homeowner’s policies contain a mortgage clause that requires the insurance company to name the mortgage holder on payment drafts. The reason for the clause is simply to protect the mortgagee’s interest in the property.
An individual or firm holding a mortgage on a piece of property has a vested interested in seeing that the property is secure and kept in god repair.
When a mortgage company is named as a payee on a settlement draft or check, problems can arise because the mortgage company can choose to hold on to all of the funds until the repairs are completed. This can be hard on you, especially if you are dealing with a contractor who is not financially solvent enough to completely the work before getting paid.
Also, it is essential that you keep your mortgage payments up to date. If you don’t, it may give the mortgage company justification either to call your loan in or to take the proceeds of the settlement and apply them toward your mortgage. If the amount of your rebuilding settlement is greater than the amount of your mortgage, the mortgage company should release the difference to you. The mortgage company generally has no legal basis for holding more than you owe.
Keep in mind that if you have hired a top quality restoration contractor to do you loss rebuild or repair, he/she will generally completed the work before expecting payment form the insurance company for their services. This take the financially load off of you, and you can most likely rest assured that you are dealing with a solvent company who can perform your work request immediately.
If you are dealing with other types of repair persons, the mortgage company may only advance approximately 10% of the monies held to commence the work. The rest of the payments throughout the job will be distributed in progress payments as work is completed. Usually, the mortgage company will require inspections to be performed to verify that the work has indeed been done.
Some states have laws that require mortgage companies to deposit insurance settlements into interest-bearing accounts. But in states that lack such a law, contact your mortgage company and suggest alternatives to release the money that may be withheld. If necessary, you can contact an attorney for assistance.
Taxes and The Internal Revenue Service (IRS)
An insurance claim filed by you may be something you should consider on your tax return. As a taxpayer, you may be allowed to “write off” certain losses. These losses might include those not covered by insurance, or portion of losses that are not covered.
The law generally does not allow deductions for losses that would be covered by insurance but were not claimed.
If the insurance company does not pay the full value of the loss, you may be able to deduct the difference between what you received from the insurance company and the value of the loss (as a tax write off). In many cases, the amount you paid for your insurance deduction is a tax deduction as well.
You should consult your accountant or tax preparer for information and advice on deducting insurance losses.
Compare Home Insurance Quotes
After a home insurance claim settlement, your home insurance rates may increase depending on the circumstances of your claim. In some cases, this may be the right time to research and compare home insurance quotes and make the switch to cheaper, more affordable home insurance coverage. NationalLenderList.com can show you some of the home insurance companies available in your area and provide rate quotes to help you decide which home insurance company best fits your needs. Additionally, compare life insurance quotes and car insurance rates to buy multiple policies from the same insurance company to get discounts. We offer consumers the ability to compare whole and term life insurance quotes so you can save money when you buy an insurance policy in the future.