Why is my insurance check issued to me and my lienholder, and what do I do with it?
Short answer. Your policy lists anyone with a financial interest in the house, usually the mortgage lender, and insurers name them on claim checks so the property securing the loan gets repaired. You cannot cash the check alone: the lienholder must endorse it, and for larger amounts it may hold the money and release it in stages as the roof work is done. Call the lender's loss draft department right away to learn its process.
Who counts as a lienholder
Usually the first mortgage lender or the company that services the loan. A home equity loan or line of credit can add a second lienholder, and some checks list both. If you paid off a loan years ago and its name is still on the check, the insurer is working from old policy records.
Getting the check endorsed
- Sign it yourself first, along with any co-owner named on the check.
- Call the loss draft or insurance claims department, not the general customer service line. Ask what they need. Common requests are a claim form, the insurer's estimate, your signed roofing contract, the contractor's W-9 and license, and proof of the contractor's insurance.
- Send the package by a tracked method or upload it, and keep copies. Small roof claims are often endorsed and returned to you. Larger ones may be deposited into a restricted account and released in draws, sometimes after an inspection of the finished work.
If the loan is paid off
Ask the former lender for a lien release or payoff letter and send it to your insurer with a request to reissue the check without that name. Then update the mortgagee listed on your policy so the next check is right.
Mistakes to avoid
- Signing the check over to anyone before the lienholder process is finished.
- Forgetting that the first check is often the actual cash value; the depreciation payment may go through the same endorsement process later.
- Waiting to call the lender until the roofer is ready to start, which can delay the job.
Our main guide on mortgage company insurance checks covers escrow draws in more detail.