An insurer sent me a check for my homeowners claim. Should I cash it?

Question

I had some frozen pipes that broke above my garage and elsewhere and did some damage. I'm having contractors fix things right now, so some of the repair costs are known, but some are not yet. In the meantime the insurer sent me a check for $3500. Should I cash it? What happens if my costs are less than the $3500? What happens if they are more? What's the best approach to getting a fair value for my claim?

Thanks!

Answer 1

Check your policy. You could ask your insurance agent but I'd be a little afraid to trust their answer.

I recently had an auto insurance claim where the company (State Farm) sent a check to cover the estimate. It wasn't yet cashed, but the repair shop had the check. Additional damage the State Farm adjuster had missed was found when the repair shop was fixing the car. State Farm sent a check for the additional amount with no hassle whatsoever. I don't know if that's standard across the insurance industry though.

Answer 2

What the company did was pay the undisputed amount of the claim. they have to do that (it's required by most insurance statutes related to fair claims handling).

You should have no problem in cashing the check, and if the damages are more than the check, just letting the insurance company know before you have the items fixed. Now, be reasonable, if the damages are a lot more, there are going to be some questions. However, if they are hidden and/or unexpected, there should be not much of an issue.

If your damages are less than $3,500, you can always refund the difference to the insurance company. If they are more, you can ask for more money, but of course you have to back up your costs with invoices, etc.


Most insurance companies send you a letter with the check, indicating what to do in the situation you are in. If in question, ask your adjuster how your company handles this situation

Answer 3

what they did is send you a check for the actual cash value to begin repairs. if the amount of repairs goes over, you will need to submit the receipts to the insurance company and then they should in turn pay you the difference. most companies send a legal "swear to damages" letter along with your check that you have to sign to get the check. there is usually a break down of what they are paying you for minus any deductible. it also shows how much they have in "reserve" to pay you any difference in cost after reapirs are complete. if you are going through an agent, discuss all this with them. they should be able to explain it to you and help with the whole process

Answer 4

More than likely if additional damage is discovered that is covered under the policy, the company will issue a supplement without any problem. Be sure and call your agent or adjuster if additional damage is found BEFORE it is repaired. It shouldn't matter if you cash the first check.

Answer 5

Look for any small print that indicates if cashing the check releases the company from all other claims. Otherwise, go ahead and cash it. If the costs are more, the company will generally pay the difference.

Answer 6

Read the check carefully. Does it say something like Full and final settlement??""

Sometimes, a co will pay additional costs if something is found once repairs get underway.

If any doubts call your agent or ins co.

Answer 7

usually the insurance estimates the damage.
If you go over the $3500 that's up to you to pay.
If it's under then you keep the difference.
If they never inspected it, they may have a maximum amount for water damage.
You could keep all the receipts and try to claim higher but in my experience a cheque is usually final.
(Was it an advance)?