What are my obligations after receiving a check? Dean Johnson asked 11 months ago
What are my obligations after receiving a check?

My elderly father was in hospice care in early 2022. I was his sole full-time caregiver. There was a water leak and damage and a claim was filed. Within a few days, a mold remediation company arrived and did the first part of the work. A month or so later, the first of two checks arrived in the mail with no accompanying explanation, no instructions, no information at all. A week later a second check arrived – also with nothing else. I went to the insurance company website to find some sort of documentation, literature, guide, restrictions, legal forms, etc….and there was nothing there except the claim was “closed”. Almost a year went by and my father – the only person on the policy – passed away. I contacted the insurance company 6 months ago to tell them this and to ask them what I needed to do to keep the house insured, and what this all meant for the claim, and my obligations regarding it. I wanted to know if I was obligated to have the remaining work done, if I had to use their preferred contractor, if I could just keep the money and never have the work done (and sell the house as-is and let the buyers pick what they wanted in exchange for a reduced price of what the claim checks were for), etc., but they were totally unresponsive and despite repeated attempts on my part to contact them, they refused to get back to me. All this time the policy has remained in my deceased father’s name and a renewal notice just came also with his name on it. So I gave up on hearing from them and resorted to contacting the local agent that is listed on my policy here locally. For the past THREE months, I have exchanged many emails with her trying to get clear answers to the questions I listed above. Between ignoring me and not answering those questions, and failing to return my emails, I am at the end of my rope in terms of knowing what to do. The agent DID provide me with several very long PDFs just today that I had never been sent and never saw detailing how the amounts were arrived at for the checks so at least I now know that. But my main questions and worries are the same – Is the house covered? What are my rights and obligations in terms of the claim? Do I have to have the work done or am I free to keep the money? How does all of this impact the coverage of the house under my name? The deed/title to the house is still in the name of my father and probate will not be completed for several months to change the name to myself and the other heir/beneficiary. I am concerned because my father made sure he maintained continuous coverage on this house and now I don’t have any understanding of what is going on. Please any help you can provide would be appreciated.

1 Answers
Selina Clark Selina Clark Expert answered 10 months ago

Please accept our sincerest condolences Mr. Johnson on the passing of your father. Dealing with an insurance claim after a loved one has passed, and they were the only insured listed on the policy, can be complicated. You had several questions, and I will address each. Is the home covered? From your explanation, it appears a renewal was sent. The renewal should include the name of your father’s agent, along with a contact number. Call the agent, or if the agent’s office is within driving distance for you, I would pay them a visit to explain the situation. I am not an attorney, but I would imagine they could at least write the policy in the name of the estate so coverage would continue. Then, once probate is completed, the policy could be written in the heir’s name(s).

As for the checks – since the mold remediation company performed work, they will expect payment. If they do not receive payment, it is possible they may file a lien against the home. If you have the information of the remediation company, you may want to contact them and settle the invoice.

In terms of the claim, since you were not listed as a “Named Insured,” unfortunately insurance claim representatives will not want to speak with you because it is messy, and they don’t have the answers you need. You have tried numerous times to reach out for explanations regarding the estimate they prepared, with no return calls. They do have those answers, but again, you were not listed on the policy, and if your father did not ‘authorize’ them to speak with you, they (the carrier) will not make any efforts to assist you. Very sad to say, but unfortunately the truth.

Since you have the ‘very long pdf’, I am assuming that is the carrier’s estimate you have. It should be an Xactimate estimate with line items explaining what they were paying for. There should be an amount listed on that estimate “Recoverable Cost Benefits,” which means that if the work is completed, those funds can be recovered. Carriers will typically require a signed contract reflecting the work will be done, or sometimes they will accept photos of completed work, then will release the funds. Again, the draft would be made payable to your father. Keep in mind, the drafts are usually only valid for 6 months, and after that a new draft would have to be requested. Also, depending on the policy, the repairs would have to be completed within 2 years from the date of loss. If you have a copy of the policy, that information can be found under the Loss Settlement portion.

If you choose to sell the home, that is entirely your decision. Oftentimes homeowners choose not to make the repairs and come to an agreement with the buyer.

My apologies that you are going through this nightmare. I hope some of this will help you.