When you are faced with a disaster loss, you, like almost every other survivor, will be confused and bewildered about the complex new requirements, including insurance, building codes, construction, and tax assessments and tax losses, to necessary to rebuild your life.

Money to rebuild will be a major necessity.  You will need funds to get back on your feet.

After its initial investigation, your insurance company may offer “advances” and/or settlement checks in various amounts.  You may be hesitant to take them believing “strings” are attached. Our advice is to accept the money as long as nothing is written on or attached to the check that may limit your future recover from the insurance company.  Most insurance companies try to lessen the financial strain of your loss with payments within the policy limits.

However, if a letter in the same envelope as the check states that the payment concludes or closes your claim, you should not accept or cash the insurance settlement check unless you are absolutely certain that the insurance company does not owe you a single penny more.  If the insurance company still owes money on your insured loss, photocopy the check and send the copy to the insurance company and, in writing, tell them to issue another check and remove any language stating your claim is closed, final or concluded.

The insurance company owes you the “undisputed” amount of your claim.  Any money that you and the insurance company agree is owed is called the “undisputed” amount.  This can be confusing because if the insurance company offers or pays less than the actual loss, most people would want to question or “dispute” the insufficient payment.  They are owed more than what is being paid but the payment is not truly “disputed”.  It is the amount that is not being paid that may be in “dispute”.  Basically, if the insurance company is making a payment to you, that is not money in “dispute”.

For example, you document and claim that your house will cost $500,000 to rebuild and the insurance company insists it will cost only $300,000. The insurance company owes you, at a minimum, $300,000. $300,000 is the “undisputed” amount.  You and the insurance company agree the house will cost at least $300,000.  The additional $200,000 is the amount in “dispute”.

Accept the $300,000 as the undisputed amount.  Let that money start working for you!  However, if you have a mortgage, the insurance company will also include the name of your lender on any check written for the dwelling and other structures (Coverages A and B).