Why did my insurance company issue my insurance settlement cheque in both my name and the name of my bank?
Your insurance settlement payment or cheque may need to be in joint names with your bank if you have a mortgage on your house. It is normally a condition of the mortgage that a buildings insurance policy is put in place and that the interest of the bank is noted on the policy. Your mortgage bank will normally require a letter from your insurance company outlining the interest of you bank in the insurance policy.
In the event of a successful insurance claim the insurance company will be required to issue the claim cheque in the joint names of you and your mortgage lender if the claim settlement is above a certain level.
Before you can negotiate the settlement cheque you will need to contact your mortgage bank and have the authorise you to lodge the cheque to your account.
Alternatively you can contact your bank in advance of the insurance company issuing the claim settlement cheque and have them issue a letter to authorise the insurance company to issue the cheque without the banks name. It is becoming less common to issue cheques but payments are made more often now by EFT.
Issues can arise also when customers who hold a joint policy wish to have the settlement issued to one of the policy holders. This normally arises when customers don’t have a joint bank account. In this instance your insurance company will need written authority signed by all policyholders and witnessed by a third party. In addition copies of identification in the form of passports or driving licenses may be required. At least one insurance company impose the onerous condition of requiring that the authority be witnessed by a solicitor.
Insurance Settlement cheque