UNDERSTANDING THE PAYMENT PROCESS
Who pays whom?
You might think that it makes sense that your Insurance Company pays you
(the insured) directly for your loss and you as the homeowner are
responsible for compensating a contractor. This is only correct if you are
Understanding the Role of your Mortgage Company
Whenever your home has been damaged and an Insurance claim is placed you
need to notify your mortgage company. Your mortgage company will then
refer you to their Loss Draft Department. Your mortgage company will send
you a packet of paperwork that needs to be filled out by you and the
contractor you have selected to repair your home along with other
necessary documentation regarding the loss.
Your insurance carrier will issue a check to you with both your name and
your mortgage company that you will need to endorse and mail to your
mortgage company's Loss Draft Department. Payments are normally issued to
both you and your contractor in installments based on the percentage of
work that has been complete. Your mortgage company will do routine
inspections before issuing each progress payment.
What if I don’t have Insurance?
I forgot to pay my insurance, am I still covered?
You may have fallen behind on your insurance payments resulting in the
cancellation of your policy. The first question you need to ask yourself
“Do I have a mortgage?”
If you have a mortgage on your home and you neglect to obtain a homeowners
policy your mortgage company will automatically place insurance on your
home. These are called Lender forced policies or lender placed policies.
These policies however are limited to structure coverage only and are
limited to what you currently owe to the bank. There is no contents
coverage or alternate living expense coverage. The claims process is still
the same. But you will need to contact your mortgage company so they can
tell you who the insurance carrier is to file the claim.
If you have a lender forced policy, it is still your right to chose what
vendors you want working on your home. Another thing you need to consider
with a lender forced policy is that there is no code upgrade coverage.
Therefore it is important to select a vendor that is experienced in lender
Contact us for a vendor referral in your area with 50+ years of
experience with Insurance claims and lender forced policies.
What if I am behind on payments?
If you are behind on payments and have not been foreclosed upon you still
have structure coverage. This is also a lender forced or lender placed
policy. It will only cover the structure up to what is owed to the bank.
Can I still choose my own vendors?
Yes, you are still entitled to choose your own vendor for repairs. As
mentioned earlier it is still up to YOU to make sure that the maximum
benefit that you are entitled to for the structure is paid.
Will the bank keep the money for repairs?
NO, just because you are behind on payments does not mean that the bank
can keep the funds for the repair to bring the loan current. It is the
mortgage companies’ best interest to repair the home to protect their
However, if you owe less money then what the damage totals, the mortgage
company may elect to pay off the loan if it is a lender forced policy.
Contact your mortgage company if this may apply to you. You may also want
to contact an attorney to discuss the legalities before assuming that what
your mortgage company is telling you is correct.
What if my insurance payment is included in my
monthly mortgage payment?
If you are paying one monthly payment to the mortgage company that
includes your homeowners insurance payment and you are unaware who your
insurance carrier is you will need to contact your mortgage company to
obtain that information in order to file a claim. Just because you pay
your insurance with your monthly mortgage payment does not mean you have a
lender forced policy. This is most likely an impound account that was set
up when you obtained the loan for your home. A forced policy would only be
in affect if you never got insurance or fell behind on payments that
resulted in the cancellation of your original policy.
What if I am mortgage free and did not pay my
If you own your home free and clear and you have not maintained an
insurance policy then you are not covered. This doesn’t mean that you
don’t have options though. You can consider doing any of the following:
• Selling your fire damaged property
• Setting up a go fund me account (www.gofundme.com) for your local
community to make donations to help your family restore your property.
• Contact Habitat for Humanity to see if they can help.
• Contact your city to find out what programs or grants you may qualify
for to help restore your property.
Contact us for investor referrals
Tragedy to Triumph
We hope you have found the information on this site
helpful. Getting informed about what you should do and your rights is the
first step to take to coming out on top after a house fire.
There are different paths to take after your home has been burned. For
some, restoring your home is the best option. For others, selling the home
in a way that is financially beneficial to you makes more sense.
It’s important to know that you are not alone as you make these decisions.
Our team is experienced in working with homeowners who have experienced
We can provide support and information regarding who to contact and what
to do. We can also provide you with a list of referrals of vendors that we
know you will be satisfied with.
Contact us today for a consultation from one of our referred vendors. It
is our goal to provide you with the information you need to ensure this
process that you are comfortable with the choices you make in regards to
We strive to add as much value to our relationship with the homeowners we
work with as possible.
We would love to talk more with you about your needs and see how we can
work together to make sure you not only survive your house fire, but also
thrive after it and turn your tragedy into triumph.