What does insurance proceeds mean on a roof claim?
Who has a claim on the money
- You, the named insured. The policy is your contract with the insurer.
- Your mortgage lender. The mortgage clause makes the lender a payee for dwelling damage, so checks often carry both names. The lender may endorse, or hold the funds and release them in stages. See mortgage company insurance checks.
- A contractor, only by agreement. A roofer has no right to your proceeds unless you sign an assignment.
Assignments of proceeds in Georgia
An assignment of benefits transfers your right to be paid to a contractor. Under O.C.G.A. 10-1-393(b)(36), effective July 1, 2025, it is an unfair practice for a residential contractor to take an assignment of insurance proceeds within one year of a declared natural disaster. Outside that window an assignment can be lawful, but read it carefully, because it can let the contractor deal with your insurer directly. See assignment of benefits in Georgia.
What the proceeds are for
With a mortgage, the lender usually requires the money to go to repairs. On a replacement cost policy, the depreciation is paid only after the roof is actually replaced, so keeping the first check and skipping the work forfeits the rest. Proceeds for interior damage, personal property or additional living expenses are separate parts of the same claim, often paid on separate checks.
Keep a paper trail
Save the estimate, every check stub and every invoice together. Proceeds that only reimburse a loss are generally not treated as income, but ask a tax professional about your own situation.