• Insurance checks must be endorsed by all listed payees.check book image by Rob Hill from Fotolia.com
  
  Check cashing happens everyday, and most of the time little to no difficulty is involved. With insurance checks, however, it can be a different story. This is because insurance checks are typically made out to all the interested parties to the transaction, which is often multiple people or businesses. They are also frequently stopped before being cashed, or held for a number of days by the bank. All these factors can make cashing insurance checks difficult.
  
  

Endorsed by All Parties

• The primary obstacle for cashing insurance checks is obtaining all the necessary signatures. Most insurance companies require the name of the policyholder to be on the check. In addition, the owner of the property in question should also be listed. In the case of a husband's car insured by a wife's policy, that means two names will appear. Finally, any lien holder to the transaction will be listed, such as a mortgagee or repair facility. A bank will not cash a check without the necessary endorsements.
  
  

Valid Settlement

• Insurance companies must stop settlement checks for many reasons. It is possible that new information was discovered after the check was issued, causing the dollar amount to change. Maybe the payees were listed incorrectly, or one was missing. Maybe the check simply went stale. For these and many other reasons, many insurance checks do not represent valid settlements and will not clear at the bank. The check must be valid to be cashed.
  
  

Holding Period

• Banks will often hold insurance checks when they are presented for cashing, both because of the large number of invalid checks and because of the high rate of fraud in the insurance industry. Even if a check is valid at the time it is presented, a stop could be placed on it during the hold time due to an ongoing fraud investigation. Especially for checks with high face amounts, you must wait out the holding period instituted by the bank before receiving your funds.