Is it legal if two people own a home but only one person collects the home insurance?
UPDATED: Apr 9, 2015
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Asked April 9, 2015
In a situation where two people are listed as owners of the home, the insurance company should not be able to pick and choose who receives a settlement. What happens in most cases is that the check is written out to both homeowners and will require both signatures in order to endorse it legally.
In a situation where the home is owned by two people, but they are listed as, for example, Mr. and Mrs. J.Q. Public, then the insurance company may write the check for only one person, inferring that the two people will act as a team. Where both owners are listed by their full names, the situation is much different and both parties must be included in any transactions related to the policy.
If, during the communications with the insurance company, one party makes it known that the other person is acting with full authority over the policy, the insurance company may write a settlement for only the person who is acknowledged as the responsible party.
Regardless, the insurance company cannot make a discretionary decision about who receives the payment on a claim, if the deed lists more than one owner, and then any checks written should name both owners, and may also name the lender because they have an insurable interest in the property until it is paid off.
If you feel that the insurance company has acted outside of the law on this matter, contact your insurance company and ask them why the settlement was not written jointly. One possible explanation is that your partner has changed the policy or documentation to remove you from the policy, which constitutes legal fraud and should be pursued in a civil court of law.
Another possibility could be that the house is owned by either party, not both. In that instance, the deed would name both parties separated by the word “or,” indicating that either one is legally able to speak on behalf of the property. If this is the case, then is perfectly legal for the home to be owned by two people but only one receives a check from a claim.
Answered April 13, 2015 by Anonymous