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Consumer Insight

May 22, 2022

What You Should Know About Settling a Homeowners Insurance Claim

How is the settlement calculated? 

When you file a claim under your homeowners insurance, a company adjuster or independent adjuster will calculate the amount of damage to your home and property.  

An adjuster will review your policy and determine what deductibles may apply and if there are any limits on the coverage. Once they’re done, they’ll contact you, your public adjuster, or lawyer (if you have one) to share their estimates and calculations. They also may contact your contractor.  

How is payment distributed?  

The settlement process is usually not a single transaction. You’ll get several payments for different parts of your claim to help you start the rebuilding and repairing process like:  

  • Additional Living Expenses (ALE). 

  • Damage to personal property. 

  • Damage to the structure. 

Most people find it takes at least 18 to 24 months to repair/rebuild their home and replace their possessions after a major disaster.  

Why might other people be included on my check? 

If you have a mortgage, your lender has an interest in making sure the home is rebuilt or that your loan is paid in full. Your mortgage lender requires you to add them as an additional insured on your homeowners policy. Because of this, the insurer is obligated to include them on the check for major repairs. You’ll need to work with your mortgage lender to get their signature on any payments.  

If you have problems working with your mortgage lender, contact your state’s agency that regulates banks and mortgage lenders or your state’s Attorney General’s Office for assistance. The federal government also has a website where you can make a complaint against your bank or mortgage lender if you aren’t getting the help you need. That website is: You can also contact your state’s department of insurance (DOI).  

What can I do if I disagree with my settlement?  

Your settlement won’t necessarily be the same as your neighbor’s. Your coverages, deductible, and policy limits may be different even if the damage looks the same. If the insurance company denies any part of the claim, ask for the denial in writing. Keep all paperwork. If you don’t believe the offer is fair, call the insurance company. Be prepared to explain why you think the offer is unfair. If you’re not satisfied with the response, contact your state insurance department.  


About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.