Bank insists on lodging insurance cheque to loan a/c?

Sorry if this is not the correct forum - I wasn't sure. Couldn't find a similar thread on same.
Basically we have received a cheque from our insurance company in part settlement of a flood claim. This money is for alternative accomodation, work to be done to the house etc.

The cheque is made out in the following names:
e.g. John Smith / AIB Bank
The bank are insisting that this cheque can only be lodged to a loan account with them i.e. to reduce the mortgage.

The Insurance company say that the cheque is made out correctly as AIB bank have an interest in the claim as we have our mortgage with them. They will not re-issue a cheque in our names only.

Does anyone have any ideas on how to get this money lodged so we can access same to pay workmen etc.? Could we take out a personal loan with the bank and then pay using this cheque? There must be an easier way than this?
Would appreciate any advise as need cash!
Thanks
Tommygirl

Hi Tommygirl,

I've no idea what the answer is to your question, but I've edited your title to make it clearer.

TommyGirl,

Technically insurance company are correct - AIB have an interest in the policy and therefore cheque has to be made out to them, however, common sense should prevail here, as you outline, you've had flood damage which presumably cheque is designed to cover (along with accommodation costs) - if AIB hold on to the proceeds, you can't fix up house - therefore their security (your home) is not being maintained properly. They do have the right to insist that monies are being spent on repairs (which is what you want to do anyway).

Seek to speak with your local manager - urgently.


pjmn

Thanks for the reply pjmn.
My local friendly bank manager made a few phonecalls and will be able to lodge the money straight into our current account. No receipts for work done required which is fortunate. We are now planning on rebuilding from scratch as we were going to extend in the new few years anyway. Let's hope the planners are as easy to deal with.
Tommygirl