How Are Home Insurance Claims Paid?

Lucy Lazarony
December 2, 2020

Once you file a home insurance claim, your insurance company will send an adjuster out to survey the damage to your home. This adjuster will determine if you will get an insurance settlement to make home repairs or if you will use the money as a reimbursement for the total loss of your home.

An adjuster will inspect your property, review damages and ask about the condition of your home before the damage was done. After the adjuster submits a report on your insurance claim, your insurance company will issue a settlement. A settlement is the amount of money the insurance company agrees to pay to repair your home and replace your belongings.

How soon will you receive an insurance settlement? An insurance company may send you an initial check within seven to 10 days of you filing a claim. This is just an advance and you’ll receive the total settlement later on. Your total settlement money may be paid out in separate checks for each category of damage to your home. For example, property damages would get a separate check from damages to personal belongings. Your home insurance company may reimburse you for a covered loss on your home through a direct deposit. A direct deposit transfers your insurance company’s payment to your checking or savings account in as little as two to five business days. Some insurance companies pay for a covered loss in the form of an e-payment which you can access over the phone or online. Check your insurance company’s website for details. Payments deposited in your account via e-payments typically arrive in 48 hours or less.

Be Active in the Claims Process

Write down the names of the people who are helping you during the claims process. Find out the case number associated with your account. Take notes and document conversations regarding the home insurance claim on your home.

Share Photos and Videos

Take photos and videos of the damages to your home. Share them with an insurance adjuster. If you have a home inventory of the items in your home, show them how your home looked before the damages occur. You want to paint as clear a picture as possible as to how your home has been damaged. If lots of personal property has been damaged, you’ll want to share photos of each item that has been damaged. So be sure to share those before-and- after photos with an insurance adjuster if you have them.

Relocate if Necessary

If you are not able to live in your home because of damages, you may be eligible for additional living expenses. Additional living expenses cover the cost of hotel rooms, food and transportation while you are living outside of your home. Be sure to ask your insurance company about additional living expenses if the damages to your home are severe. These additional living expenses can be a huge financial help to families with homes that are badly damaged. So don’t hesitate to contact your insurance company, if you need to evacuate your home while repairs are taking place.

The Role of Your Mortgage Lender

What does your mortgage lender have to do with home repairs paid by your insurance company? If you have a mortgage on your house, your insurance company might make out a check to both you and your mortgage lender or the insurance company might make the payment directly to a mortgage lender. Most mortgage agreements require this in order to protect the lender’s interest in the home. So if you have a mortgage there’s a good chance your lender will be involved in your claims process. How does it work? A mortgage lender will place the money in escrow and make payments to the contractor as repairs are completed. In addition, a mortgage company may inspect the damage to your home and ensure the claim money is being spent on the proper repairs.

The Role of the Contractor

The contractor doing repairs on your home could be paid directly by your insurance company. For this to happen, you’ll need to file a form allowing your insurance company to pay the contractor directly. Just make sure you are satisfied with the repair work before payments from the insurance company are made. So keep close tabs on the repair work and share any concerns with your insurance company.

How Long Does it Take to Get an Insurance Settlement?

There are a number of factors that determine when that all-important settlement check will arrive. These include the extent of damages to the home. Severe damages may take longer to assess, whereas a simple repair may be easier to assess. The length of time it takes for an adjuster to visit your home is another important factor. If it takes three days for an adjuster to arrive, your claim process will go smoother than if you have to wait two weeks to see an adjuster to discuss the damages in your home. Whether you and the insurance company can agree on the amount of money in a potential settlement is another important factor. If you see eye to eye, the claims process goes quicker. If you disagree, things slow down until an agreement can be found. And finally how quickly an insurance company manages claims varies from insurance company to insurance company, as does the claims services and payment amounts.

Shop Around for Home Insurance Companies

If you are unhappy with how an insurance company handled an insurance claim, be sure to shop around for a new insurer. There are many home insurance companies out there that would be happy to have your business. Just be sure to check out insurance rates from several new companies before you decide on a new home insurance company.

SmartFinancial makes this easy to do. With SmartFinancial, you’ll be able to comparison shop for a variety of home insurance rates near you. And because SmartFinancial has access to more than 200 insurance companies you’re bound to find the home insurance coverage and rate that you are looking for.

Get a Free Home Insurance Quote Online Now.

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