We get this question a lot. A homeowner suffers damage to their home. They notify their insurance company of the loss. The insurance company inspects the damage then sends the homeowner a check. Some homeowners worry what impact cashing the check may have on their ability to recover more money on their claim. Most often, it is totally fine to cash a check your insurance company sends you with a few important caveats: 1) either the check itself; 2) the documentation that was sent with the check; 3) or your discussions with the insurance company about the payment do not establish the check was intended as “full and final” satisfaction of your entire claim. How do you make sure the check was not sent in full and final satisfaction? Here are some tips:
1. Inspect the Check Carefully for “Full and Final” Language
The first and most important thing you can do is inspect the check carefully. Does it say anywhere on the check “full and final” satisfaction of, or payment on, your insurance claim? This is pretty rare, but it may be in the memo line of the check or somewhere on the front or back. Be sure to examine every word on the check before cashing it. If the check states anywhere on it “full and final” satisfaction, or payment on, your claim, your cashing of the check may allow your insurance company to argue you accepted the amount of the check as payment in full of your insurance claim. This is a legal concept we have written about before known as “accord and satisfaction” that essentially makes your cashing of the check operate as an agreement to accept the amount of the check as payment in full on your claim. To avoid this, do not cash a check that says “full and final” settlement or payment. If the check, as is most often the case, does not say “full and final” settlement on it, this is the first step toward ensuring your cashing of the check will not prejudice your ability to recover more money on your claim.
2. Inspect the Documentation Accompanying the Check for “Full and Final” Language
Just like the check itself, you should examine every word of the letter your insurance company sends with the check very carefully. Under Florida law, if an insurance company sends a partial payment that is not intended as payment in full on the claim, it is required to include in the letter accompanying the check the following language in 12-point bold uppercase:
WE ARE CONTINUING TO EVALUATE YOUR CLAIM INVOLVING YOUR INSURED PROPERTY AND MAY ISSUE ADDITIONAL PAYMENTS.
See Fla. Stat. § 627.70131(6)(b). Alternative language may also be used that explains “this estimate of damage does not necessarily constitute a full and final settlement of your claim” or “even after you've deposited the enclosed payment, you are allowed to pursue us for payment for additional damage or coverage you think might apply to your loss.” If the letter accompanying your check contains language like this it would suggest your insurance company does not intend the check to constitute full and final payment on your insurance claim and would mean it is safe for you to cash the check. It is important that you read the accompanying letter carefully and thoroughly and that you understand what it all means. If you do not understand all the language in the letter or have questions about the letter or your insurance company's intentions, you should seek guidance or legal counsel before cashing the check.
3. Ensure You Did Not Agree to Accept the Amount of the Check as “Full and Final” Settlement of Your Entire Claim
Consider the context in which the check was sent. Was there discussion (either verbally, over the phone, or (more commonly now) via email) between yourself and your insurance company about the value (dollar amount) of your claim or any potential statement made by you that could be perceived as an agreement to accept the amount of the check in full and final satisfaction of your entire insurance claim? This, again, is very unlikely but should be considered before you cash the check. If there was no such discussion or alleged agreement, and the check merely came in the mail after the insurance company inspected your home (which is very common), and both the check and the letter accompanying the check do not suggest the check was sent as full and final payment on your claim, your cashing of the check should not prejudice your ability to recover more money on your claim.
If You Have Doubts or Questions, Contact Us for Help
If you are unsure whether the check was intended as full and final satisfaction of your claim or you are concerned what impact your cashing of the check may have on your claim, let us help. As insurance attorneys who have been helping homeowners with their property damage claims for decades, we know you likely have many questions about the best actions to take to ensure you recover everything you are entitled to in order to restore your home. If you have doubts or questions concerning a check your insurance company sent you, do not hesitate to reach out to us. We never charge any fee or cost or require any obligation on your part to simply talk to you about your claim and answer your questions. We're here to help and make sure you have the knowledge and information you need to protect your rights and preserve your insurance claim.