What should you do with an insurance check for a roof replacement?
Short answer. Deposit or endorse the insurance check toward the roof work, not other expenses, because most policies only release the rest of the money after the roof is replaced. If your mortgage company is named on the check, contact its loss draft department to learn how it releases funds, and pay your contractor according to your contract, not all up front.
First, read the check and the letter
- Who is named. You, any co-owner, and often your mortgage company.
- What it covers. The explanation letter usually breaks out dwelling, other structures, and contents.
- What is held back. Recoverable depreciation, and sometimes items still under review.
If the mortgage company is on it
Lenders usually need the check endorsed and sent to them, then release money in stages: an initial draw, then the rest after an inspection or proof of completion. Requirements vary, so call early and ask for their checklist. Smaller checks are sometimes endorsed and returned to you quickly.
Paying the roofer
- Pay a reasonable deposit if your contract calls for one, and the balance on completion.
- Never pay the full amount before work starts.
- Do not sign over the entire claim; in Georgia, a contractor taking an assignment of insurance proceeds within one year of a declared disaster is an unfair practice.
What not to do
Do not spend the check on other things and skip the roof. You lose the recoverable depreciation, and unrepaired damage can be excluded the next time a storm hits.
Related: mortgage company on the check, assignment of benefits in Georgia, and recoverable depreciation.