Jan 8, 2025
Florida property owner Reza Razavi thought he had a golden ticket from his insurance company in the wake of Hurricane Milton.
Initially, he was relieved when he received a $20,000 advance check from his insurer, so he could begin repairs on his multi-unit building on Pass-A-Grille Beach, Florida. Hurricane Milton, which caused an estimated $50 billion in damage, flooded his property and many of his neighbors.
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But his relief turned to frustration when TD Bank, which holds his mortgage, refused to endorse the check, halting his much-needed repairs. They claim he needs notarized documentation explaining the need for the money and how the funds will be spent.
“We had to remove the flooring, the baseboards and drywall,” Razavi told WFTS Tampa reporters. “We need funds to be able to complete our work.”
Razavi wasn’t the only property owner facing this roadblock. TD Bank’s refusal to cash similar insurance checks is affecting others in Florida; his neighbor also received an advance check from his insurance company worth $2,500 that TD Bank refused to cash. Here are workarounds so you can avoid further headaches should your insurer come through, but your bank does not.
Why are banks holding up insurance checks?
Banks are cautious about releasing funds from insurance checks because they are often returned or disputed. The bank may also hold a vested interest in the property. In Razavi's case, TD Bank holds the mortgage. Mortgage lenders typically require proof that the insurance payouts are used for legitimate repairs.
TD Bank, for example, asks for notarized documentation detailing the planned repairs and sometimes requests a claims adjuster’s report. However, those documents can take weeks or even months to obtain due to the backlog created by disasters like Milton.
Industry expert Karyn Roeling of Seibert Insurance admitted that while documentation is a common request for large final claim payments, banks do not commonly require it for partial payments.
“I don't think it's right,” she told ABC reporters. “You would hope that the bank knows that a catastrophe has occurred in the area. You would think that somebody at the bank could make an exception to say, yes, our normal protocol is this but we're not going to follow normal protocol because this is an unprecedented two events, back-to-back.”
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What can homeowners do?
When one door closes, another opens and homeowners stuck waiting have several options. Filing a complaint with the state, which Razavi did, can sometimes pressure the banks to take quicker action. Florida residents should consider filing a complaint with the Florida Office of Financial Regulation or the Florida Attorney General's Consumer Protection Division. Calling your insurance company can also help, as they may be able to provide preliminary documentation or contact the bank on your behalf.
Consider contacting your bank directly, either by phone or in person, before attempting to deposit a check. They may be able to provide guidance on deposit requirements or offer additional resources. Leveraging additional lines of credit can be risky, but may help bridge the financial gap while homeowners wait for insurance funds to be released.
When you do start making repairs, ensure that you are keeping meticulous records of the damage and steps to repair it. The bank may need photos, videos, receipts and invoices for repair work or your adjuster. In some cases, hiring an independent insurance adjuster, who works on behalf of the property owner, can streamline the process.
When in doubt, it may be worth contacting your local news stations. Just two hours after ABC reporter Katie LaGrone contacted TD Bank, the bank deposited Razavi’s check.
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Danielle is a personal finance writer whose work has appeared in publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love. She’s especially passionate about helping families and kids learn smart money habits early.
