Should You Return a Partial Payout From an Insurance Claim?

Getting the money from a home insurance claim is the most valuable step in the claims process. A home insurance claim check can either be sent directly to the contractor tasked with repairing your home or to you, the policyholder. If your insurance company opts to pay you directly, you may not get full payment right away. Instead, you could get a portion of the payment, and the rest will come after you submit proof of repairs to your home insurance company. 

In some cases, your insurance provider could overpay for a claim, leaving you with some extra cash. You may be able to keep extra money from an insurance claim, but make sure you understand the insurance company’s policy before you pocket anything extra.

What is a partial insurance payout?

If your home insurance company decides to pay you directly, you could either receive the entire claim payout, or you may receive a partial payout. In a partial insurance payout, you’ll receive a portion of the total claims payout amount upfront. Once you submit more documentation about your home repair process, you will then receive the rest.

Alternatively, if you receive the entire payout upfront, you could end up with extra funds if the repairs end up costing less than what your insurance company estimated. In rare cases, you may even have extra money left over after a partial claims payout. The cost of repairs can vary greatly based on current economic conditions, like the cost of labor and materials, so an insurer’s estimates may not always line up with the actual price you pay.

Does returning a payout decrease your home insurance premium?

Unfortunately, filing a property insurance claim can result in a higher annual premium when you renew your policy next. However, returning a claims payout or a partial payout won’t cause your homeowners insurance premium to return to its original rate. 

Your premium is based on both the frequency of claims and the amount paid. Even if you return some of the money, the claim is still part of your insurance history and will show up on your Comprehensive Loss Underwriting Exchange report. Claims that result in larger payouts may cause your home insurance premium to increase more than a smaller claim, but even if you return some money to lower your claim payout, it’s not likely that you’ll return enough to offset a premium increase.

The table below illustrates how average home insurance rates can change after filing different home insurance claims. For reference, the national average cost of home insurance is $2,397 per year for $300,000 in dwelling coverage, according to Quadrant Information Services, an insurance data analytics firm.

It’s important to note that it’s not common to receive extra money for a claim. You generally receive payment in stages, with the final check issued after the insurance company receives a certificate of completion to confirm both the actual repairs and the final cost. 

The insurance company requires proof and receipts to show a repair was completed. In some cases, your contractor may request a “direction to pay,” which asks that they be paid by the insurance company rather than the homeowner. In this situation, you may need to confirm the work was done properly before your home insurance company pays the contractor the final installment.

Understanding the claim payout process

There are several steps that take place during the home insurance claim payout and repair process.

1. Damage reported:First, a field adjuster will come to your home, take photos of the damage and provide a comprehensive report to your insurer.
2. Assessment: Then, your insurance company will determine whether the loss is covered, and if it is, provide an estimate of the repair costs needed based on your policy’s coverage limits. At that point, you might receive an initial payment from the insurance company to start repair work on your home.
3. Submit completion form: Once the work is completed, you’ll submit the Certificate of Completion, which verifies the funds were used to complete the required repairs. Once the repairs are completed, your insurer will initiate the release of the remaining balance.
4. Finalize claim forms: If you submit a claim for personal property, you’ll have to account for whether you have an actual cash value (ACV) policy or replacement cost coverage. Your initial claim check for personal property damage will be for ACV. For replacement cost coverage, once you’ve purchased new items to replace the damaged or destroyed items, you typically submit proof of purchase and receive a second payment for the remaining amount, covering your items at replacement cost value.

Also, remember that your deductible is subtracted from the claim amount you receive from your insurance company. Typically, you pay the deductible to the contractor completing the work, while the insurance company pays the rest. While a higher deductible typically saves you money on your annual premium, it does mean you’ll pay more out of pocket following a claim.

If you fail to complete the repairs outlined by your insurance company, you may be denied future claims or your coverage may be canceled. Doing so protects the insurance company from potential liability if you don’t complete the necessary repairs.

Read more: What to do if your home insurance claim is denied

Are there deadlines to use your payout?

Insurance payout deadlines depend on your home insurance policy. This is most relevant for policies that include replacement costs. You’ll initially be paid out based on the actual cash value. You won’t receive the final payment encompassing full replacement cost until you submit your Certificate of Completion showing that you updated those items accordingly. You may have several months to do this, but you’ll need to check with your insurer to make sure you follow their requirements.

There may be some circumstances in which you have leftover money in a claim payout, it is rare. The adjuster’s estimate takes into account current market rates for labor and materials. However, those actual numbers can change, and you may experience marginal savings in the repair process. 

In this situation, check with your insurance carrier about what to do. If you have a mortgage on your home, your claims checks may be payable to both you and your mortgage lender. This can make excess funds a little trickier to handle, as you’ll need your mortgage lender’s permission to cash the check and send back any overage. If your claim payouts are paid by direct deposit, you may be able to write a check to your insurance company or wire excess payments back directly. 

Your insurance policy may also spell out exactly what to do in this scenario. Some insurance companies include specific language that requires policyholders to return excess funds.

Frequently asked questions

• What happens if you don’t use insurance money for repairs?
  

  If you use insurance money for things other than paying for repairs caused by a covered claim, it could be considered insurance fraud. If you have excess funds after repairs have been completed or received overpayment from your insurance company, it’s best to contact them to determine the best course of action. Failing to act and using the insurance money for other things could cause your policy to be canceled, and the insurer could report the incident. Honesty is best in any insurance-related matter.

• Can I keep extra money from an insurance claim?
  

  Although leftover funds from claim payouts are rare, it’s not unheard of. In this situation, it’s recommended to let your insurance provider know and ask for directions on what to do with the extra funds.

• How do I get the most out of my homeowners insurance claim?
  

  To take advantage of your homeowners insurance claim, you’ll want to read your policy again and review your coverage, policy limits, and endorsements and exclusions. Document everything related to the claim, which you can use to dispute a claim or settlement, if needed. Having a detailed home inventory can also help ensure you get what you deserve out of your home insurance claim.

• Can I deposit a check made out to me and my mortgage company?
  

  Yes, you can deposit a check made out to you and your mortgage lender, but it requires the lender to endorse the check first. Contact the lender’s loss department if you receive a check written to both of you. They can give you directions on how to get the check endorsed by them. You may need to provide details about your insurance claim and the contractor’s invoice. The process is different for every lender, but some may keep the funds in escrow rather than letting you deposit the money in your personal account.

Methodology

Bankrate utilizes Quadrant Information Services to analyze August 2025 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2023 Toyota Camry, commute five days a week and drive 12,000 miles annually. Bundling and paperless billing discounts are applied. 

These are sample rates and should only be used for comparative purposes. Your quotes will differ.

If otherwise specified, the base profile has been modified with the following driver characteristics:

• Credit-based insurance scores:
  

  Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit or limit the use of credit as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts and Michigan.

• Incidents:
  

  Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket, single DUI conviction and lapse in coverage.

• Mileage:
  

  Rates were calculated by evaluating our base profile with the following differences in mileage: 2K, 5K, 12K (base), 15K and 20K.

• Model:
  

  Unless otherwise stated, rates are for 2023 vehicle models. For new vs used vehicles, we included the following year in our calculations: 2013.

• Age:
  

  Rates were calculated by evaluating our base profile with the ages 18-70 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations. For teen drivers, rates were determined by adding a 16- or 17-year-old teen to their 40-year-old married parents’ policy. The rates displayed reflect the total cost of a driver this age added to their parents’ policy.

• Gender:
  

  The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, North Carolina, Pennsylvania.

• Status:
  

  Rates were evaluated based on the following marital/family status: single (base), married, 40-year-old married man and woman. Marital status is not a rating factor in Hawaii and Massachusetts.

Bankrate Scores

Our 2025 Bankrate Score for auto insurance considers key variables that our insurance editorial team determined impact policyholders’ experiences with an insurance company. These factors include a robust assessment of each company’s cost of coverage, product availability, financial strength ratings, online capabilities and customer and claims support accessibility. We grouped these factors into three essential categories — cost and ratings, coverage and savings, and support — which we then weighted in a tiered approach. 

Each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. Our scoring model provides a comprehensive view, indicating when companies excel across several key areas and highlighting where they fall short.

• Tier 1 (Cost & ratings): To determine how well auto insurance companies satisfy these priorities, our team analyzed quoted premiums from Quadrant Information Services (if available), as well as any of the latest third-party agency ratings from J.D. Power, AM Best, Demotech and the National Association of Insurance Commissioners (NAIC).
• Tier 2 (Coverage & savings): We assessed companies’ coverage options and availability to help policyholders find a provider that balances cost with coverage. Additionally, we evaluated the discount options listed on each company’s website.
• Tier 3 (Support): To encompass the many ways an auto insurance company can support policyholders, we analyzed avenues of customer accessibility along with community support. This analysis incorporated additional financial strength ratings from S&P and Moody’s and factored in a company’s corporate sustainability efforts.