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How to File an Insurance Claim If Your Property is Damaged

Read Time: 6 Minutes November 08, 2024

If you’ve suffered significant damage to your home or property, dealing with the insurance loss claim process might be overwhelming. In this article we take you through some important steps, but be sure to reach out to your insurance provider first for details about the process of filing a claim.

Should I file a homeowner’s insurance claim?

The first step is to make sure the damage you want to report is covered by your insurance policy. Homeowner’s insurance typically covers:

  • Theft
  • Fire damage
  • Smoke Damage
  • Wind Damage
  • Hail Damage
  • Lightning Damage
  • Water Damage

Natural disasters such as floods and earthquakes often aren’t covered by standard policies – you’ll need specific insurance for those circumstances.

Once you confirm the damage is covered, make sure that filing a claim is worth it. Insurance claims are meant for major damage, not minor repairs. If you file several claims in a year, your insurer might raise your rate or even cancel your policy.

How do I file my insurance claim?

If you do decide to file a claim, take these steps to make the process as easy as possible:

  • Call your insurance provider. Your insurance will assign an agent (adjuster) to your claim and give you a claim number. Your adjuster will help you through the process.
  • If a crime took place, call police immediately. When police arrive, they’ll make a report that you can use to document your claim.
  • Document, document, document. Take plenty of video and photos of the damage. During the claims process, it’s critical that you document all damage and all repairs, keep receipts, write down the information of who you speak with and what information they give you.
  • Only make essential repairs for now. Make repairs necessary to prevent further damage to your home, such as covering broken windows with plastic to keep rain out. Don’t throw out damaged items until your insurance adjuster says it’s ok.
  • Get cost estimates from licensed contractors. Be sure to hire reputable contractors and have them look over the entire scope of the damage to your property. Your insurance company will use the quotes they provide to calculate the cost of repairs. Do not begin major repairs until your insurance adjuster says to.

What happens once I submit my claim?

Once you submit your claim to your insurance company, your adjuster will come to your property to assess the damage. They’ll figure out the cost of repairs, create a report and send a check to cover repair costs. You’ll probably receive separate checks for each type of loss on your claim. As your mortgage servicer, we’ll be listed as a payee on your settlement check(s).

If you have defaulted on your loan at the time of the loss, all funds, no matter the amount, will be placed in escrow.

If your claim is equal to $40,000 or less, we will require the check(s) from your insurance company to be sent to us, along with the adjuster’s report. We’ll endorse the check(s) and return them to you to use for repairs. (On USDA loans, this applies to claims of $20,000 or less.)

If your claim is greater than $40,000, you will endorse the checks and then send them to us. We’ll place the money in a restricted escrow account so repairs can be monitored. (This applies to claims greater than $20,000 for USDA loans.)

If you’ve filed a claim with your insurance company, please register on our insurance portal to get resources, upload documents and monitor the status of your claim.

Note: Any funds for emergency advances or personal property will be endorsed and released to you immediately. Your insurance company determines if emergency funds are needed.

How do I get the money from my insurance claim funds?

If the damage is assessed at less than $40,000, we’ll endorse your check(s) and return them to you so you can make repairs.

If your damage is assessed to be greater than $40,000, or if you were defaulted on your loan at the time of the loss, we’ll hold your funds in escrow. Before we can draw your funds from that account, you need to provide us with the following documentation. After we receive the documents, it will take 7 to 10 business days for the first withdrawal to take place.

  • Claim check signed by all parties
  • Fully itemized and completed adjuster’s report
  • Contractor’s work proposal, signed and accepted
  • Newrez Loss Draft Claim form
  • Contractor’s signed and completed W9 (delinquent loans only)
  • Signed Owner’s Affidavit (USDA loans only)

Include your loan number on all documents and check(s) and mail them to:

Overnight mail:

Newrez c/o PLP
ATTN: Loss Draft Department
700 Tower Drive
Suite 400
Troy, MI 48098-2808

Regular Mail:

Newrez c/o PLP
ATTN: Loss Draft Department
PO Box 7087
Troy, MI 48007-7087

After the first draw, you’ll need to let us know that you need a new home inspection so we can order one for you, and send us these documents each time you want to withdraw funds:

  • Inspection verifying percentage of work complete (could cost up to $60)
  • Sworn statement from contractor or the waiver of lien

If you haven’t been late on mortgage payments, the funds will be made payable to you. If your loan is behind on payments, the funds will be made payable to you and your contractor. If you or your contractor have questions, call us at 877-826-4433 or send an email to newrezLD@proctorlp.com.

Can I use funds from my claim to pay down my loan?

Maybe. If your claim funds are enough to cover your payoff quote, you might be able to apply the funds to your loan. Call us at 866-317-2347 to find out if you’re eligible.

If you’re behind on loan payments, you cannot use claim funds to pay for your loan. However, if you experience a total loss, Newrez can use claim funds to pay off the loan.

What happens once my claim is settled?

After your claim has settled, you might want to review your insurance policy and make any necessary changes to your coverage.

A claim might cause your insurance rates to increase, but your insurance company might be able to help you save money by bundling home and auto insurance, or by raising your deductible. If you feel like your insurance is straining your budget, shop for a new insurance provider.

Where can I learn more about the loss claim process?

If you recently submitted a homeowner’s insurance loss claim, we will send you a packet in the mail (or to your email) with detailed information including processing times, types of claims, and lists required documents and forms. If you haven’t received this packet or if you need assistance with your claim, call our Proctor Claims Department at 877-826-4433.

Lastly, if you or your home has been affected by a natural disaster, here are some resources:

  • Apply for federal disaster relief by calling the FEMA Helpline at 800-621-3362 (TTY: 800-462-7585).
  • Go to DisasterAssistance.gov to find out if you qualify for Individual Disaster Assistance.
  • For step-by-step instructions on how to file a FEMA flood disaster claim and how to work with your insurance company, go to fema.gov/nfip-file-your-claim.