NFIP Flood Claim Advance Payment Explanation for Mortgage Lender

Mortgage lender explanation letter for advance payment checks and lender release process.

Dear POLICYHOLDER,

 

Please provide this letter to your mortgage lender along with your advance payment check once received. We have just submitted the request for this advance payment to the Carrier. Please note that the Carrier’s review, approval, and issuance of this advance may take a couple of weeks, but you should generally expect to receive the physical check in your mailbox within 3 weeks from the date the advance request was signed.

 

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To Whom It May Concern,

 

The insured is providing this letter to help clarify the nature of the payment issued in connection with their flood insurance claim under the National Flood Insurance Program (NFIP).

 

Following the flood inspection, the adjuster submitted photo documentation of the loss to the Carrier, and the Carrier issued an ADVANCE PAYMENT to the insured.

 

Advance payments are a common practice on NFIP claims and are issued to allow the insured to begin necessary cleanup, stabilization, and initial repair work while the overall claim review process, which can be lengthy, continues. These funds are intended to help address flood-related damages promptly and reduce the risk of further deterioration to the structure. This advance represents only a small portion of the total claim settlement ultimately expected.

 

This payment does not represent the final settlement of the claim. It is only a partial payment issued against the total documented damages, and additional payments may be issued once the adjuster completes the estimate/worksheet and the Carrier reviews and approves the Final Report for the total amount payable under the claim.

 

Because the property is subject to a mortgage, the payment includes the mortgage lender as a co-payee in accordance with the mortgage clause. These funds are intended to be applied toward repairs that restore and protect the property serving as collateral for the mortgage.

 

Prompt endorsement and release of these funds will allow the insured to begin necessary repairs and mitigation work, which ultimately helps protect the condition and value of the mortgaged property.

 

DO NOT REQUIRE THE ADJUSTER’S WORKSHEET OR ESTIMATE AS A CONDITION OF RELEASING THESE ADVANCE FUNDS TO THE INSURED. NO COMPLETED OR CARRIER-APPROVED ADJUSTER ESTIMATE EXISTS FOR THIS ADVANCE PAYMENT AT THIS TIME. THAT PROCESS MAY TAKE MONTHS TO COMPLETE, WHILE THE INSURED REQUIRES THESE FUNDS NOW TO MITIGATE ADDITIONAL DAMAGE AND BEGIN RESTORING THE PROPERTY.

 

For additional information regarding the NFIP claims process, including advance claim payments and mortgage lender involvement with claim checks, please refer to the official FEMA/NFIP Claims Handbook at the link below.

 

https://agents.floodsmart.gov/sites/default/files/media/document/2025-07/fema-nfip-claims-handbook-08-2024.pdf?utm_source=chatgpt.com <https://na01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fagents.floodsmart.gov%2Fsites%2Fdefault%2Ffiles%2Fmedia%2Fdocument%2F2025-07%2Ffema-nfip-claims-handbook-08-2024.pdf%3Futm_source%3Dchatgpt.com&data=05%7C02%7C%7C7571eef67a8b49e3a06808de7c9414ab%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C639085172589942587%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=0EAcLxOg3vU4qXHCbS8RatdxAHgWFaiTRysgkDiMlQ8%3D&reserved=0> 

 

 

Thank you for your prompt attention and cooperation.

 

 

Christopher T. Gutshall

Insurance Adjuster

NFIP FCN 0070008289

 

M 330.437.9168  |  E  gutflood@outlook.com <mailto:gutflood@outlook.com> 

 

Authority & Disclaimer: Field adjusters cannot approve/deny coverage or authorize payment. Final claim decisions are made only by the carrier. 

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