Do you need to know the rules when it comes to using home insurance claim money? I see many people get in trouble after they receive their insurance settlement. What they do, is they take their check and deposit it. Once they do this, they use the money to pay off their car, or some credit cards, buy a boat, or even take a cruise!
Well, I am sure you can see the problem with this. First of all, the claim settlement money was not intended for this. Its purpose is to do the necessary repairs to your property in order to bring it back to pre-loss condition.
It is highly recommended that you don’t do this with the money for a few reasons: You need to know that if you have a mortgage on your property, the lender will probably not release the money to you until you either start the work on your house or have a signed contract for repairs on your house. And even when they do see you are actually doing the work, they are likely to only release a small part of the settlement as the project moves along.
How Are You Using Home Insurance Claim Money?
Assuming you don’t have a mortgage on the property, you are still obligated to do the repairs. If you don’t, then all those areas of your property that you didn’t repair would be denied on any future claim that would arise. The insurance company does this because they won’t agree to pay for the replacement of something a second time when the damage was not fixed from the first time.
My name is Alan Himmel and I am a public adjuster for over a decade. My job is to help people with their insurance claims to get them the best settlement possible. However, if you need help, just call and maybe I can answer a question or two for you. You can call me direct: 954.659.8333 Alan Himmel, Public Adjuster.