Step 5 – Get your payout and rebuild
Your payout plan will depend on your homeowners insurance policy. It may cover some or all your repair costs — which could mean rebuilding your home or using the funds to pay off your mortgage if you want.
You may receive an initial partial payout to assist with urgent repairs, temporary fixes, or to replace personal property.
To make your return to normal as fast as possible, take action. Here are some good places to start.
Plan ahead with your mortgage servicer
Work with your mortgage company to develop a repair plan — you are not required to pay off your mortgage if your insurance claim exceeds your mortgage unless it is not feasible to repair or rebuild the property. Your plan will provide a solid foundation from which to start the recovery and rebuilding process.
Ask for disaster-related mortgage payment forbearance while you deal with damages. A forbearance allows you to temporarily suspend or reduce your monthly mortgage payments for a period of time.
Streamline payout processing
For property repairs, your name and the mortgage servicer’s name will be on the insurance payout check. This means you will both need to sign the check to release the funds, which can take time. To avoid delays, call your mortgage servicer to report the loss right after you file your homeowners insurance claim. Ask what procedures you must follow to get the bank to co-sign the check and release the payout immediately.
Likewise, make sure all your identification information is up to date — such as addresses and phone numbers — which will ensure you can be reached easily.
Monitor repair progress, and request escrow releases
Major repairs are commonly funded in stages from an escrow account. The mortgage servicer will hold a portion of your payout money in escrow and release it as repairs are completed and inspected.
Don’t wait for the mortgage servicer or contractors to verify milestones themselves. Monitor the rebuilding progress yourself and contact your lender as soon as the contractor completes each milestone. This should move the rebuilding process along and help you get back into your home.