Homeowner's Insurance: What You Need to Know

It is also critical that you inform your insurance agent if your loan servicer changes. This may happen more than once, if your loan is sold or if your lender contracts with another company to service the loan.

Handling the Claim

What if you have an insurance claim?

If you have a mortgage, the lender usually requires that it be listed on your insurance declaration as a loss payee. If this is the case and you suffer damage to your home, the insurance claim check will likely be made payable to you and to the lender or loan servicer. In this case, you need to contact the lender or loan servicer and ask it to endorse the check so you can access the funds for your repairs.

Many lenders have policies to release only a certain dollar amount to the borrower and dole out the rest as repairs are made. This can be an arduous process, so make sure you keep careful records of all estimates and repair receipts, and stay in contact with the lender or loan servicer throughout the process.

One more thing: If the damage to your home results from a hurricane or other large-scale disaster, call your insurance company as soon as possible. You will need to get in line and wait for a claims adjuster to visit. If you don't place your claim immediately, the wait might be several months.

Coming up next: Renovations that pay.