You’ve suffered a loss on your home, such as fire, storm damage, or flooding. Repairs are needed and a homeowner’s insurance claim is necessary. Your insurance company pays the claim and funds the repairs. It’s important to understand when you have a mortgage on your home or property, your mortgage company will be fully involved in the claim.

When you were issued your insurance policy, the entity holding the mortgage is listed on your policy as the mortgagee of the property. This is a condition of being granted the original mortgage loan to purchase your house. Since the lender has a financial interest in the property, when you file a claim for loss, the check from your insurance company will be made out to both you and your mortgage company.

To maximize the amount of the payout, consider hiring a public adjuster to help you through the claims process. Once a check is issued, you’ll endorse the check and must also get the insurance company to sign off on the check as well.  The mortgage company has the option to sign the check or take the money and put it into an escrow account. If escrowed, the money would be held in your mortgage company’s account until the work has progressed and is completed. The reason it is done this way is to protect the mortgage company.

A homeowner could easily cash in the funds and disappear without doing repairs, and now the lender has a damaged house, no funds to fix it from the insurer, and an outstanding loan on a home that needs repairs. The check made out to the homeowner and the mortgage company avoids these risks for the lender.

The funds deposited with the mortgage company are then usually handled by a specialized department, called the Loss Department, that controls the money you need to repair the damaged property. Many lenders outsource this work to companies outside their own. Since the staff at the Loss Department may or may not have access to your mortgage papers, it's important for you to review your papers to understand the terms and your rights are.

Since the Loss Department may be less than cooperative, when you have knowledge of your mortgage papers, it's power. The department may not be responsive, will give you general answers rather than specific ones, or it may be hard to reach a live person. It's important you remain polite but persistent. Be sure to document the date, time, and person you reach each time you communicate.

You have the option to hire professional help to work through the issues with the mortgage holder. The personal property will not have the mortgage company's name on the check since they have no insurable interest in your personal belongings. The bank can only put their name on the check when they have insurable interest.

When dealing with your mortgage company, and their Loss Department, let them know without the money, you cannot get their collateral rebuilt. Also remind them that treating you well will be good public relations for them, and in this age of financial upheaval, good PR is hard to find.

Understanding the mortgage company’s role in your insurance claim helps you obtain a fair and equitable distribution of monies, in a timely manner, so you can repair your losses with a minimum of difficulty

Miller Public Adjusters currently serves the states of
Wisconsin - Florida - Illinois - Indiana - Michigan - Minnesota - Texas

Call us 24 hours a day at (800)958-4829 to schedule an appointment or
please fill out a Free Claim Review to see if we can help.