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Gallagher to Mortgage Holders: Know Your Bank’s Procedure for Processing Insurance Claim Checks

8/30/2004

CONTACT: Tami Torres
(850) 413-2842

TALLAHASSEE-With thousands of Floridians filing insurance claims for damages sustained during Hurricane Charley, it's important for storm victims holding mortgage liens to be aware of bank procedures for receiving insurance funds to make repairs. Florida's Chief Financial Officer Tom Gallagher is advising Floridians in disaster areas to check with their financial institutions to find out the best way to begin the rebuilding process.

"Homeowners now focused on repairing storm damage will need to work with their mortgage lender and financial institution to follow the steps necessary to ensure your home is properly repaired," said Gallagher.

While policies may vary with individual financial institutions, insurance checks are usually made payable to both the homeowner and mortgage holder. To receive funds, homeowners must forward claim checks to their lenders for endorsement. For best security, a consumer should wait to endorse his or her check until after the lender has done so. However, lenders may have additional procedures to follow.

The lender may require a contractor's estimate of repair costs before any funds are released. The lender may also retain insurance proceeds for disbursement as repairs are completed.

Your lender may be willing to free up a portion of the proceeds if payments are required to begin repairs. However, consumers are advised never to pay construction contractors in cash or in full before work begins.

Consumers needing assistance in contacting their insurance company or filing claims should call the Department of Financial Services' hurricane hotline at 1-800-22-STORM.