When you pay off your car loan or mortgage it is important for you to let your homeowner’s or auto insurance agent know this has been done.
Why? During the recent storm (Sandy), our office had many homeowner insurance claims. Some of the claim checks were needlessly delayed.
If you have a mortgagee listed on your homeowner’s policy, you have given your mortgage company some rights on your policy. If you have a claim and you are sent a check from the insurance company to pay for your damage, you may be surprised to see the check made out to you and your mortgage company.
Your mortgage company wants to make sure you are repairing the property damaged, so they will not endorse the check until the work is contracted or completed.
This is why it is very important to let your agent know when the loan is paid off. That way the agent will notify your insurance company to remove the mortgage company from your policy and their name will not be on your claim check.
The same applies to your car loan. When you pay off your car loan, call your insurance agent to have the lien holder removed from your auto policy.
Removing the mortgage or lien holder from your Homeowner’s and Car Insurance policies will speed up your claim payment since the check will not need to be endorsed by them or reissued to remove their name from the check. Take a few moments now to make sure your policies are correct. Save yourself the headache of having your claim payment delayed.