Can I Claim Property Damage Even If My Home Loan Is In Default?Posted May 19, 2015
If your property is damaged, and if your insurance coverage is current, you are entitled to file a property damage claim. In fact, it may be required. The question is who will receive the check from the insurance company. In most cases, the insurer will issue funds meant for structural repair by way of a check that is made out to both the mortgagee and the mortgage lender. The check will have to be signed by both parties. The reason the lender is named on the check is to ensure that the monies are used for actual property repair.
What should I do if my home is damaged?
Even if the home loan is in arrears, it is in the best interest of the lender that the property remains in good condition. If and when your property is damaged, contact your insurance company and your mortgage lender, too. Do it without delay. It is not a good idea for the mortgage holder to learn about property damage from the insurance company. Keeping the lender “in the loop,” so to speak, may improve your chance of a favorable outcome. Notifying the lender of property damage is more than courtesy; it may be required in the fine print of your mortgage documents.
In some cases, the mortgage lender will monitor damage claims made on property that is in arrears. When this happens, the lender may release money only to a licensed repair contractor. The lender may also want to do an inspection to verify repairs.
What if the mortgage lender wants to keep all of the money?
If your mortgage lender receives insurance funds that are intended for property repair, and the lender demands that the money be applied to your delinquent mortgage in lieu of repairs, the lender may be in serious violation of the law. An attorney can explain the details to you.
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If you believe you are being unfairly treated by your insurance company, call (405) 272-0303 to schedule a free consultation right away. The bad faith lawyers at Bennett Law Firm may be able to assist. You won’t know if we can help you, unless you make the call.