Family waits months for bank to pay out insurance check

OAK LAWN, Ill. (WLS) -- Those with insurance claims might think problems are solved with a check. But that's not the case for a family in southwest suburban Oak Lawn that is fighting for flood relief money.

In August, Janet Kawczynski's finished basement and kitchen were ruined by flood damage. When she was cleared by FEMA to get flood insurance money, Kawczynski was relieved. But three months later, she's having trouble getting her FEMA approved flood insurance money from her bank.

"I don't sleep at night. I'm up constantly thinking why this is happening, why they won't give us the money. I've done everything that they asked. I don't know. It's extremely emotional," Kawczynski said.

Under the National Flood Insurance Program, Allstate, Kawczynski's insurance company, said it was legally required to issue the $25,000 FEMA check to Kawczynski and the home lender, U.S. Bank.

"This is their policy. This is what it is. I actually had two people tell me that if I want this money that I have to go pay off my mortgage," she said.

U.S. Bank's written policy states that to receive the "first draw" homeowners must submit signed estimates. The I-Team contacted U.S. Bank and a spokesperson said the bank was working with Kawczynski.

"This is a loan for which Fannie Mae is the investor, and as such, we need to follow their rules for the disbursement of funds. They require us to ensure the value of the property is restored, and disbursements are made based on work completed," the bank said in an email.

Fannie Mae confirmed the policy with the I-Team.

Kawczynski said she did submit some work receipts. She estimates she spent about $5,000 shortly after the flood but got the run around is still waiting for the money.

"I've called them every day since September to ask them what's up. They want paperwork. I sent paperwork. They didn't get it. There was always some excuse," Kawczynski said.

Shortly after the I-Team got involved, Kawczynski said U.S. Bank cut her a check for $10,000. For claims over $10,000, the bank said it needs to make sure repairs are made by a licensed contractor and requires a bank inspection. A letter from U.S. Bank said another "draw" will be released when two thirds of the repairs are completed.

"I don't think anybody should have to go through this. I mean I just want the house fixed, that's what we pay the insurance for," Kawczynski said.

Having homeowners pay upfront and wait for reimbursements is a common policy with many lenders and insurance companies. People who live in a flood zone should know their policies inside and out to make sure they get that line of credit up front.