Why Is My Mortgage Company On My Insurance Claim Check?

Understandably, this is a very common question that I continuously receive from clients. Most people feel that it's their property and their mortgage company has no right to be named.
 
If a mortgage company is listed on your insurance claim check, it is because they have a financial interest in the property that was damaged and insured. Here is how it works:
 
Mortgage
When you purchase property and must take out a mortgage, the mortgage company provides you with the funds to buy the property.  In return, they have a financial interest in the property until the mortgage is satisfied.
 
Insurance Requirement
Mortgage companies require you to maintain property insurance on the property to protect both your interest and their interest. There is no exceptions and you must have adequate coverage.
 
Loss or Damage
If your property is damaged by fire, flood, hurricane, water damage or any other covered peril, you may need to file a property damage insurance claim to cover the cost of the repairs or replacement of the damaged property.
 
Insurance Claim Check
Once coverage on your claim is provided, the insurance company will issue a check. The check will usually be made out to the property owners and the mortgage company. 
 
Mortgage Company Will Not Be On Check
If you sustain damage to your personal belongings or lose use of your property due to the damage, the mortgage company will not be names on these claim checks because they only have a financial interest in the building.
 
Endorsement by Mortgage Company
Since the mortgage company has a financial interest in the property, they want to ensure that the insurance claim payment is used to repair or replace the damaged property.

Every mortgage company handles property damage claims differently and have a their own process in place.  Depending on the amount of the claim check, some companies will endorse the check and return it to you, while others may hold the check and issue payments in stages as the repairs are made.
 
Choose a Team You Can Trust
Settling insurance claims today is a complicated, and often, an overwhelming process especially when having to deal with your mortgage company.  Allow us to give your claim our personal attention. Contact us to get started.