Who gets the recoverable depreciation check?
Short answer. The recoverable depreciation check is typically made out to the same payees as your first check: you and every other named insured, plus your mortgage company if it is on the policy. Some insurers also add the contractor's name when you or the contractor asked them to, which means everyone named must endorse it.
Names you may see on it
- Named insureds. Everyone listed on the declarations page, often both spouses.
- Mortgage company. Any lender in the policy's mortgage clause, including a second mortgage or home equity lender.
- Contractor. Included when you signed a direction to pay or an assignment, or when the carrier's practice is to add the contractor on the final payment.
Why the second check can be simpler
By the time depreciation is released, the work is finished. A lender may ask only for proof of completion and a lien waiver before endorsing it. Call the lender's loss draft department before the check arrives and ask exactly what it needs.
Clearing it
- Each named payee endorses the back.
- If a lender is named, send the check to the lender with the documents it requests.
- Pay the contractor's remaining balance once the funds clear.
If the check has the wrong names
A lender that was paid off, or a former spouse no longer on title, can still appear if the policy was never updated. Ask the insurer to reissue the check, with proof such as a payoff letter or the current deed, and update the policy so the next claim is clean. See insurance checks with a mortgage company on them and recoverable depreciation.