Stephannie Ciantro, Claims Manager, explains why the bank that owns your mortgage may have to endorse your claims check.
When an insured becomes aware that a claim payment is forthcoming, it is a moment of relief and gratitude that the process is finally over. There are some instances, however, when there is still one step needed before the check can be cashed.
If the insured, whether it is a building or owner has a mortgagee listed on their Policy, the claim check will be made out to that entity as well as the insured. In order to cash that check, the insured will need to have the check endorsed by their bank in order to have the funds released. This minor detail causes a bit of confusion, but it need not.
The mortgagee is listed on the check because they have an insurable interest in the property—the building or home partly belongs to them as well as the insured. In order to have the check reissued without the name of the mortgagee, the insured will have to provide proof that the mortgage has been satisfied, and then an endorsement can be issued removing them from the policy. Only then will a check be reissued without the mortgagee name on it. It is a relatively easy step, albeit a necessary one, to close out the claim process. If you have any questions, you can always check with your broker.
For more information, please contact us.