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Elizabeth has extensive insurance industry experience, having written for Insureon, Rate Retriever, and Insurify. She’s also finance and insurance editor for Car and Driver.
Katie Powers Auto and Life Insurance EditorKatie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
Updated December 14, 2023
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Homeowners insurance helps pay to repair or rebuild your home after a covered loss, like a fire or natural disaster. When you file a claim, your insurer evaluates the damage and determines the estimated cost of repairs. The amount you receive depends on factors like the type of damage, the type of claim, and how your policy pays out.
It’s important to understand how insurance companies pay out claims if you have a home insurance policy. Here’s what you need to know about how insurance companies pay out claims, including how long it takes to receive a claim settlement.
After a covered loss, you should file a claim with your home insurance company as soon as possible. Most home insurance policies cover claims related to dwelling damage, personal belongings, personal liability, and additional living expenses. [1]
In most cases, the insurance company will send an adjuster to your home to assess the damage in person and determine how much it will cost to fix. The insurer then uses that information to calculate an appropriate settlement based on the situation and your policy limits. [2]
Once your insurance company investigates and approves your claim, it will provide an initial settlement. You can use the first check to make initial repairs while you wait for the final payment to arrive. The amount of time it takes to receive the money depends on several factors, including your insurer and the nature of the claim.
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Based on 3,806+ reviewsMost home insurance policies have a deductible, which is the amount of money that you’re responsible for paying out of pocket when you file a dwelling or personal property insurance claim. When you receive the claim settlement, you’ll receive the full amount minus your deductible. [3]
It’s common for homeowners insurance policies to have a fixed deductible. For example, you might have a $1,000 deductible for dwelling insurance and a $450 deductible for personal belongings coverage.
However, some policies have a percentage deductible based on the insured value of your home. For instance, if you insure your home for $300,000 and have a 2% deductible, you’d be responsible for the first $6,000 of damage. If you live in an area that experiences hurricanes or windstorms, you might have a percentage deductible for those losses specifically. [4]
After filing a homeowners insurance claim, you may receive the settlement in multiple installments.
You may receive different checks for each of the following coverage types during the settlement process:
The dwelling insurance check goes toward repairing or rebuilding the physical structure of your home. In the case of a total loss that destroyed your entire house, you’ll typically receive a settlement for the full insured value of your home.
If a covered incident damages any of your personal items, you’ll receive a separate check to replace your belongings. Most insurers will write you a check for the full insured value of your belongings if an incident — like a fire — completely destroys them.
If you have to temporarily relocate during home repairs, you’ll get a check to spend on ALE for a period of time, including expenses for a hotel, parking, and restaurant meals.
Your first settlement check following a personal property claim can cover the cash value of the items, even if you have a replacement cost policy. ACV reflects the items’ depreciation based on age and wear and tear.
If you have a replacement cost policy, you must replace the damaged items and provide receipts to receive reimbursement for their replacement value. After submitting proof of replacement, you’ll receive a check for the difference between the ACV and the replacement cost value of the items.
Most home insurers don’t cover flood damage. If you have flood insurance, you’ll file your flood insurance claim and receive a separate check from your flood insurance company.
Home insurance claim payments don’t always go to the homeowner directly. While you might receive certain checks, others may go elsewhere, like to your mortgage company.
Learn more about who will receive the home insurance claim payment in different situations below.
As the homeowner, you receive any checks meant to replace personal belongings. You’re responsible for re-purchasing damaged items using the settlement from your insurer. You might also receive the money for structural repair work, but that’s not always the case.
In addition, you’ll also receive money for additional living expenses. You can spend this on temporary accommodations, such as a hotel stay and restaurant meals, during the repair or rebuild of your home.
In the case of a dwelling insurance claim, your home insurance company might pay the contractor directly. Before the insurer gives your contractor the insurance money, you’ll need to sign a legal contract stating that the contractor will use the funds for the necessary repairs.
When your insurance company pays the contractor directly, it will manage the contractors and make payments until the project’s completion.
If you have a home loan, your insurer will make out your claim checks to you and your mortgage lender. That’s because your lender has a financial interest in your property. If you own a condo or live in a co-op community, the insurer might also list your condo management company as an additional insured on your policy.
Typically, the lender or condo management company will need to endorse your claim settlement check before you can deposit the money and access the funds. While you might receive the check directly, you’ll need to work with your lender or the condo management company to get the necessary signatures.
Depending on your lender’s requirements, they might hold the total settlement amount in an escrow account and pay the contractors as they make repairs. Some lenders will also need to inspect the finished repairs before paying the contractor.
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The period of time it takes to receive a claim check from your home insurance company depends on a variety of factors, like the category of damage. Your location is one of the biggest factors because some states impose a time limit for paying insurance claims.
Some states also have time limit guidelines for non-typical circumstances, like if the insurance company needs to extend the investigation. In these instances, the company will likely need to inform you of the extended deadline.
Here are the time limit requirements in all 50 states and Washington, D.C.
