After you experience damage to your property and have started your insurance claim, typically your insurance company will send an adjuster (that works for them) to your property to inspect and document the damage. After the damage is assessed by your insurance company, they sometimes will issue a payment, and this is called the undisputed payment. This is the amount of money the insurance believes is sufficient to repair your damaged property.
The undisputed amount is typically a low number and not even close to what you’ll need to start fixing your property damage. This is where it is beneficial to have a public adjuster working on your claim. Your public adjuster will write their own estimate of the damage to your property and negotiate more payments until the claim is settled.
Will depositing the undisputed check end your claim?
Receiving an undisputed payment, even if it’s not enough to cover the full cost of repair, does not mean this is the end of your insurance claim.
You can deposit the undisputed check without worry.
Your claim is not closed or final until you signed a release from the insurance company.
Your insurance company will send a “settlement letter” usually with their estimate and use words like final settlement, settlement drafts, settlement amount and etc. That does not mean it is settled or final.
They will break down the payments which identify the policy coverage. For example, Your insurer may pay $10,000 under Coverage A and $5000 under Coverage C, which will be broken down in the settlement letter.
If your payment is insufficient to repair and restore your damaged property, do not sign any document stating that the payment constitutes a full and final settlement (typically called a release) of your claim.
If there is no written agreement that this undisputed payment will be a final resolution of your claim, you are free to deposit the funds and begin your repairs.
Why is the mortgage listed on my insurance check?
If you have a mortgage on your property, chances are your mortgage company will be named as a payee on your check since they are listed on your policy, so be prepared for that. If your mortgage company is listed on your insurance check call the mortgage company and talk to their loss draft department and obtain their specific instructions for getting the check endorsed. Every mortgage company has its own process and often it can take some time to get through that process, so it’s important that you find out what steps you need to take to be certain you will receive your insurance proceeds in the timeliest manner possible.