How do payments for home insurance claims work?

You might receive multiple homeowners insurance settlement checks after you file a claim — though who these payments are written out to will vary depending on the damage involved.

Jennifer Gimbel

By

Jennifer Gimbel

Jennifer Gimbel

Senior Managing Editor & Home Insurance Expert

Jennifer Gimbel is a senior managing editor and home insurance expert at Policygenius, where she oversees our homeowners insurance coverage. Previously, she was the managing editor at Finder.com and a content strategist at Babble.com.

Updated|4 min read

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When your home or personal belongings are damaged in a covered loss, you can file a home insurance claim to pay for repairs or replacements. If your claim is accepted, you’ll receive one or multiple homeowners insurance settlement checks to cover the damage. But who receives these payments and when depends on the type of claim, where you live, and your home insurance company.

How do payments for home insurance claims work?

Depending on your home insurance claim, you may receive multiple payments throughout the settlement process. The initial payment is not always the final one — insurance companies often send out an advance toward your settlement amount so you can get started on repairs as soon as possible.

If a claims adjuster comes out and offers you an on-the-spot settlement, feel free to accept the check right away. If later you find more damage that needs to be paid for, you can reopen the claim and file for an additional amount. While exact rules vary by insurance company and state, you typically have one year after you’ve filed your claim to complete it. 

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Why did I receive multiple claim settlement checks?

You may receive multiple checks based on the structures and personal belongings damaged in a covered event. 

You’ll also receive a separate check to cover the additional living expenses portion of your claim. This is the money you receive to cover hotel stays, restaurant meals, pet boarding, and more living expenses while you stay elsewhere during repairs.

If you have separate flood, earthquake, wildfire, or windstorm insurance policies, you’ll also receive separate checks for those claims as well.

Let’s take a look at an example.

Say a tornado rips through your neighborhood, severely damaging your home to the point where you can no longer live in it during repairs. In this case, you’ll receive four separate checks:

  • One check to repair the structure of your home

  • One check to replace your belongings that were damaged

  • One check to reimburse you for additional living expenses while you stay elsewhere

  • One check to reimburse you for windstorm damage since you had a separate policy in place

You might receive two claim checks to cover your personal belongings

The first check you receive will be for the actual cash value of your items — meaning depreciation is taken into account. This is the case even if you have replacement cost coverage for your personal belongings. Then, once you show your insurance company receipts for your new belongings, they’ll send you another check to cover the difference.

Why do insurance companies do this? Because they want to make sure you actually replace the items. If you don’t, you’ll only be paid the depreciated value of your belongings. 

Who gets the home insurance claim payments?

In some cases, the home insurance claim payments may go directly to you. But other times the claim settlement checks may be sent to the contractor who’s overseeing your home’s repairs or to your mortgage lender if you’re currently paying off your home and they’re listed as a “named insured” on your home insurance policy.

Owner of the property

If a claim settlement check is made directly to you, you’ll either receive the money in the form of a check or through direct deposit.

Contractor working on your home

Your claim settlement money might also be sent directly to your contractor who’s completing the repairs. 

Before a claim payment can be made to your contractor, their construction firm may require you to sign a “direction to pay” form that allows your insurance company to pay them directly. The contractor’s construction firm then bills your insurance company directly. 

Just make sure that you’re satisfied with the repairs before your insurance company sends the contractor the final payment and the claim is closed.

Mortgage lender or condo management company

The check might also be made out to both you and your mortgage lender or condo management company. Before you can cash the check, you’ll need to have it signed by the third party. This is so the lender or management company can ensure all of the necessary repairs are made.

Alternatively, your lender might store the money in an escrow account and release payments as the repairs are being completed. 

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How long does it take for homeowners insurance to pay a claim?

Generally, it takes anywhere from a few days to a few weeks to receive payment for a claim — though exactly how long it takes you will depend on the laws of your state and your insurance company.

Some states like Minnesota and Texas require companies to pay out claims within five days after acceptance, while others like Florida give companies up to 90 days to send your payment. And then some states like Mississippi and Virginia have no set time limit at all.

Here’s a breakdown of how long your insurance company has to make a payment based on your state’s insurance regulations.

State

After accepting a claim, insurers must make a payment within ...

Alabama

30 days

Alaska

30 days

Arizona

30 days

Arkansas

10 days

California

30 days

Colorado

30 to 45 days

Connecticut

30 days

Delaware

No set time limit

District of Columbia

No set time limit

Florida

90 days

Georgia

10 days

Hawaii

30 days

Idaho

No set time limit

Illinois

30 days

Indiana

No set time limit

Iowa

30 days

Kansas

No set time limit

Kentucky

30 days

Louisiana

30 days

Maine

No set time limit

Maryland

15 days

Massachusetts

No set time limit

Michigan

60 days

Minnesota

5 days

Mississippi

No set time limit

Missouri

No set time limit

Montana

30 to 60 days

Nebraska

15 days

Nevada

30 days

New Hampshire

5 days

New Jersey

30 to 90 days

New Mexico

No set time limit

New York

5 days

North Carolina

10 days

North Dakota

No set time limit

Ohio

10 days

Oklahoma

No set time limit

Oregon

No set time limit

Pennsylvania

No set time limit

Rhode Island

30 days

South Carolina

20 to 40 days

South Dakota

No set time limit

Tennessee

30 days

Texas

5 days

Utah

30 days

Vermont

10 days

Virginia

No set time limit

Washington

15 days

West Virginia

15 days

Wisconsin

30 days

Wyoming

No set time limit

If your state doesn’t require insurance companies to pay out claims within a certain period of time, they still likely require insurers to investigate the claim within a certain number of days after receipt — often 15 to 30 days.

And then most states also have rules about how soon after receipt of a claim an insurance company must tell you whether it’s been accepted or denied — usually anywhere from 30 to 45 days.

You can visit your state’s insurance department website for more information about the specific rules about claims processing in your state.

What if my state doesn’t have a set time limit?

If your state doesn’t have a set time limit for payment of claims, the best way to find out what the payment timeline will be is by reaching out to your insurance company directly. 

What can delay my claim payment?

The insurance claim settlement process can be delayed for any of the following reasons:

  • Didn’t submit the proper paperwork

  • Took too long to answer questions from your claims adjuster

  • Didn’t keep a home inventory or document the expenses related to your claim

  • Filed a complicated claim that involves statements from multiple third parties

  • Filed an expensive claim that takes longer to be approved

How to speed up the claims settlement process

Here are a few ways to speed up the claims settlement process — and ideally get paid faster!

  • File your claim ASAP. Most home insurance policies have time limits for when you need to file a claim. Plus, the faster you file it, the fresher in your mind the incident is — and the more information you’ll be able to provide your insurance company.

  • Keep in touch with your claims adjuster regularly. Your insurance company should be able to reach you to ask questions and clarify information regarding your claim. This might include setting up a home inspection to estimate the cost of damage. Many insurance companies have a feature that lets you submit docs, schedule appointments, and track the status of your claim all online or through its mobile app.

  • Document expenses and payments associated with your claim. Save receipts for any immediate expenses you have after a loss, like if you need to board up a broken window, as well as more substantial repair bills. Have your home inventory handy — your insurance provider may need it to verify the actual cash value of your personal belongings as part of the settlement process.

  • Sign up to receive your claim settlement payment electronically. This way you won’t need to wait to receive your check through the mail. If the option is available to you, you could receive your claim settlement payment directly in your bank account in as little as 48 hours after your claim has been approved.

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Frequently asked questions

How long do I have to file a claim and get paid?

You typically have years to file a claim with your insurance company after a covered loss, though it varies by state. However, the longer you wait, the more difficult it will be to have your claim accepted for the full cost of your loss. Experts recommend filing your claim ASAP after the claims incident to ensure you’re approved and paid in a timely manner.

Do home insurance adjusters write checks?

Yes, some home insurance adjusters write settlement checks. They may offer you a full settlement check — minus your deductible — right there on the spot. Otherwise, they might write you a check for an advance of your settlement so you can get started on repairs. They’ll then pay out the rest of your claim settlement at a later date after repairs have been completed. It varies by insurance company, so your best bet is to ask.

How do I pay my deductible after I file a claim?

Most insurance companies simply subtract your deductible amount from your final claim settlement check — you usually don’t have to pay anything to your insurer. However, it varies by company, so we recommend asking your insurer how the process works.

Author

Senior Managing Editor & Home Insurance Expert

Jennifer Gimbel

Senior Managing Editor & Home Insurance Expert

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Jennifer Gimbel is a senior managing editor and home insurance expert at Policygenius, where she oversees our homeowners insurance coverage. Previously, she was the managing editor at Finder.com and a content strategist at Babble.com.

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