More on Home Insurance
More on Home Insurance
Published September 17, 2020|5 min read
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A home is one of the most important assets you’ll ever own, so you should protect it with a comprehensive homeowners insurance policy. Homeowners insurance is financial protection: When your home is damaged in a covered loss, you can file a claim to cover any repairs that need to be made — your insurance will even cover a full rebuild of your home if it’s destroyed by a covered peril.
If your claim is accepted, you’ll receive one (or several) claims payments to help you cover the damage. Those payments may arrive in the form of a check, or through an electronic transfer such as a direct deposit. They may also be made out to you, to your contractor, or to your lender if you’re currently paying a mortgage on your home.
Most home insurance companies will issue a claim payment via check, direct deposit, or a mobile e-payment
Claim settlements can take anywhere from 24 hours (with a mobile e-payment) to 10 business days (with a check) to show up in your account
A claim payment may be issued to you, to your contractor, or to your mortgage lender
When your home, property, or personal belongings are damaged in a covered loss, you can file a home insurance claim through your insurance company to be reimbursed for the damage. The process of filing a home insurance claim will vary based on your provider and the type of damage, but generally, you’ll want to:
File a police report if your home was burglarized or vandalized
Inform your insurance company of the incident and file a claim online, through a mobile app, or over the phone
Fill out the claim documents provided to you
Provide documentation that confirms the value of your damaged or stolen items
Make temporary repairs, like boarding up a broken window or replacing necessary items
Meet with your claims adjuster
Get an estimate for the repairs
Save any receipts for related expenses, like hotel stays or items you had to replace immediately
Receive the claim payout and complete repairs
During the claims process, your insurance company will assign you an adjuster, who will either visit your home in person to inspect the damage, or evaluate the damage remotely. Their job is also to help determine how much your final claim settlement will be.
Once your claim is accepted, you’ll likely receive a claim settlement via check or an electronic transfer, but the time it takes to arrive in your account will vary. When you contact your provider to file a claim, be sure to ask how you can expect to receive the payment, as your company may offer additional options that may be a better fit for you.
Here’s what you can expect if your claim settlement arrives in any of the following forms:
Sometimes, insurance companies will send you an advance against the total settlement amount via check, soon after you file a claim. That means you might receive an initial check to help you get back on your feet within 7-10 days of filing claim’s receipt, and as you sort out what the total loss was with your insurer, you’ll receive the rest of the settlement.
Your total settlement amount may also be paid out with separate checks for each category of damage. If your home, shed, and a dresser full of clothing were all damaged in a covered loss like a fire, your insurance company may send you one check to cover your home repairs, another to cover your shed, and a third to replace your dresser and the clothing inside.
Your home insurance provider may also reimburse you for a covered loss through an electronic transfer such as a direct deposit or a mobile e-payment . Direct deposits transfer your insurance company’s payment directly to your checking or savings account, reimbursing you for repairs in as little as 2-5 business days.
If the option is available to you through your insurer, your claim may also be paid in the form of an e-payment which you can access over the phone or online through your insurance company's claims portal. Payments deposited into your account via an e-payment typically arrive within 48 hours or less, and you may receive text alerts updating you on the status of your payment until the transaction is complete.
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A homeowners insurance claim payment may be sent directly to you through one of the mediums listed above, or it may go to your contractor who will use the payment to repair your damaged home, or to your mortgage lender who will ensure that any necessary repairs are being accounted for.
If a claim settlement is being made directly to you, you may receive the money in the form of a check or through an electronic transfer such as a direct deposit. If your home becomes uninhabitable after a covered loss and you’re forced to live somewhere else for a while, your insurance company may also send you a check for additional living expenses which can cover the costs of a hotel room, rent for a temporary apartment, food, clothing, and transportation.
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 bills your insurance company directly, but make sure that you’re satisfied with the repairs before your insurance company sends the contractor the final payment and the claim is closed.
As a named insured, your mortgage lender will be privy to insurance claims payments related to your home’s structure. Your insurance company might make a check out to you and your mortgage lender, or they may make the payment directly to your mortgage lender who might store the money in an escrow account and release payments as the repairs are being completed. Your mortgage company may inspect the damage and make sure the claims settlement is being spent on the necessary repairs.
A single claim can pull from various provisions in your policy which means you may receive several different payments when it’s settled.
Unfortunately, there’s no set time frame for how long it takes a claim to pay out, it may be days, weeks or even over a month. Some states have rules requiring insurance companies to pay claims within a certain amount of time, while some stipulate that the settlement must be paid within a “reasonable” timeframe. How fast you receive a claims settlement will depend on a number of factors including:
How long you wait to contact your insurance company
How quickly you provide all the necessary documents
The type of damage or loss
The total cost of the damage or loss
To speed up the process, you should provide as many details about the damage as possible when filing your claim so there’s less back and forth between you and your provider (having an updated home inventory before disaster strikes can save you a lot of time during the claims process). Stay on top of communication with your claims adjuster and keep track of all the payments you received and expenses you incur during the process.
You should also take advantage of the option to enroll in e-payment if it’s available to you; with some insurers, you may receive a payment for a covered loss in 48 hours or less.
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