I have a settlement check for $18,000 from my insurance company issued through a bank with whom I don't do business. Is the bank allowed to refuse to cash the check if I am not its customer even if I have the proper identification and proof that the check is valid?
There could be two issues here, if the bank refuses to honor this check that is drawn on it. First is the matter of the size of the check. The bank simply may not have enough ready cash to give any one customer.
However, probably the key issue is the matter of identification. The bank may have a policy of not cashing checks for non-customers simply because it is concerned about the validity of endorsements. In other words, it isn't satisfied that it has identification that satisfies its requirements. If the check is deposited in your bank, the insurance company's bank gets a warranty from your bank that it knows the person with whom it is dealing, and your bank stands behind that warranty if there's any dispute about who got the funds. If you are concerned about the length of time it will take you to have access to deposited funds if you simply deposit the check to your own account, contact the insurance company and see if they can bring pressure on their bank to loosen up and cash the check, but if you had deposited the check, you'd have access to the funds by now.
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