Question about insurance settlement check

[mattocs]

My house which I have a mortgage on through M&T Bank had some damage done to it, and I will be getting a check from State Farm soon for damages.

From what I understand, the check will be written out to both myself and the bank.

How does this usually work? Do I go to a branch or mail it in and have it endorsed so I can deposit it to my account and pay my contractor for repairs, or does the lender put it in escrow, and my contractor has to go through them to get paid for the repairs?

I'll call in the morning to be sure, but I was just wondering how this works. Thanks.

 

[imported_weadjust]

<-----Insurance adjuster for 18 years.

Depends on the bank. Every bank has their own way of doing things. Some banks release a portion of the money (using escrow) to start repairs and then release the remaining balance once the repairs are completed. Some banks will inspect the work to protect thier collateral. Some banks will just sign off on the check. You will have to contact the bank. It's alot easier if it is a local bank and not a large national lender like Chase, Wells Fargo.

If you are behind on your payments some banks won't release the money until you current.

State Farm cut me a check on water claim on a rental property recently for aprox. $2700 without the lienholder on the check. I don't know what amount State Farm uses to put the lien holder on the check.

 

[mattocs]

Ok, thanks. Being current isn't a problem. I have been late in the past when my wife was out of work due to a back injury, but we're up to date now.

Thanks again. I will call in the morning.

 

[EagleKeeper]

when I had an insurance check from State Farm back in the early '90s, it was made out also to the lein holder.

I asked, apparently if the amount was over a certain amount the lein holder anted to be notified so they could ensure that the work would be done.

In my case, the lein holder wanted to credit the check against the principle - I showed that I could not afford the repairs unless I had the check to pay the contractor.
They agreed to pay the contractor once work was completed.

Greedy buggers.