Do i get to keep any money left over from a home insurance claim check after repairs are complete?
UPDATED: Oct 14, 2020
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I had all the repairs to my home done for less than the insurance company sent me a check for, the check is in both my name and the mortgage company so I have to send them the check so they can send me a check back in just my name only because I already paid for the repairs out of pocket, but they are requesting verifiable paid receipts, (which I have) but my receipts will show that I had the repairs done for less than what the insurance company sent me a check for, is that left over money mine? or can the mortgage company hold any money left over and do something like send it back to the insurance company? how exactly does that work because I would like to have other improvements to my home with that left over money, Thank You.”
Asked January 25, 2016
The money you receive from your home insurance company for repairs is a blanket amount. You must have a look at your insurance policy to understand how much money you will receive, and you must carefully study the policy to understand what all the money is for. This brief answer will help explain why you get to keep the money that you receive.
The Money For Repairs
You will receive money for repairs or rebuilding of the physical structure of your home, and that amount if separate from other amounts on your homeowner's insurance policy. You must ensure that you understand what that amount is, and you must be able to complete the repairs or rebuilding for that amount. Any amount that is too low for your liking must be changed with help from your agent.
Money For Personal Items
The money you receive to replace personal items is a different line-item on your policy. You will receive money based on what the adjuster decides, but this money is meant to help replace personal property. Do not get the two checks confused when you file you claim with your carrier.
You Get The Keep The Overage
The overage on your claim check is yours to keep. You have paid your premiums so that you may receive that money, and the money is yours once it is turned over by the insurance company. You may need every dollar to repair your home or replace personal belongings, but it is possible you may repair or replace everything for less money. The extra money may be used for any purpose you like, and it is all counted under the umbrella of your claims payment.
Do You Report This Cash?
The cash you receive from your insurance company is known as a claims payment, and you must not report how the money was used. You will use the money to help repair or replace your home, and you will use much of it to help replace your personal items. The insurance company cannot tell you what to do with it because you may need more of it later.
The money you receive from your insurance claim is yours to keep. Study how much you may receive in the event of a total loss so that you are prepared to file a claim if one is needed.
Answered January 26, 2016 by InsuranceStar