When natural disasters cause damage to your home, either minimally or completely, repairing the damage to your property can be a complicated and time consuming process. You have to contact both your insurance company to file a claim and your mortgage company who can help you with processing your insurance claim check, or loss drafting.
Notify Your Insurance and Mortgage Providers
Before contacting your mortgage company, you must notify your insurance provider of the loss. The insurance company will then inspect the property and provide a general estimate of how much it will cost to repair. You and your mortgage company will then be issued a check based on that estimate.
The mortgage company who holds your home loan in KC should provide you with a loss draft checklist. This checklist will outline the items you will need in order to expedite the claims process and will differ if the loss is greater or less than $10,000.
Insurance & Mortgage Providers Can Monitor Your Claim
If you have a home loan in KC, your mortgage servicing company and the company that invests in your loan, such as Fannie Mae and Freddie Mac, will have a say in how, when, and whether or not they will endorse your check. They can also hold onto it and disburse the funds to you and your contractor to begin the needed repair work.
A claim will be monitored if:
- The amount of the loss, as determined by the Actual Cash Value on the adjustor’s worksheet, is above the limit in which the investor will sign off on the check without verifying that the work is being done to the lender’s satisfaction
- The loan is in default
If a claim is not monitored, the mortgage company who holds your home loan in KC will sign and release the check to the homeowner so they may pay for any repairs.
Claim Money is Distributed Over Time
For the majority of loss draft cases, the lender will require that the check be signed and sent into them. They will then distribute the payments to the contractor in three installments. These payments will typically be given to the contractor as:
- One third at the beginning of the claim as a down payment to the contractor to begin work
- One third after a 50% inspection
- One third after a 100% inspection is completed to the satisfaction of the mortgage company
This process is meant to ensure that claim money is being used how it is supposed to be and that repairs are made on time.