It’s been a little over a week since tornadoes ripped through North Texas. Reports say that at least 11 people died in the wake of that storm. With clean up underway, the financial toll is now coming to light. The Insurance Council of Texas estimates damage at $1.2 billion. For many families and businesses, the insurance check could not come fast enough. But is there such a thing as an insurance check that arrives too fast?
Bill Hethcock, a reporter for the Dallas Business Journal, says lawyers he interviewed recommend holding off on cashing in.
“It puts you in a worsened legal position down the line, should there be a dispute about the amount of the damages,” he says.
If you cash the check, the insurance company could argue that you were pleased with the settlement amount “or you would not have cashed the check,” Hethcock says.
“Now there’s dispute from people with the insurance industry that say that a claim is actually always open, you can always go back if you’re not satisfied and negotiate,” he says. “People in the legal community that say that you have, in essence, agreed – if you cash the check – to the amount of the settlement.”
Hethcock says folks should read their policy, which covers whether your true replacement costs or only the cash value of your losses are covered. Policies will also address other issues, including whether the cost of lost business is covered.
Listen to the full interview in the audio player above.