If the insurance policy was in both names, then the insurance company, in the absence of anything else to persuade them otherwise, is correct to issue the cheque in both names also. Important factors which the insurance company has to consider when paying the cheque are (i) who was paying the insurance premiums for the house insurance, (ii) for who's benefit was the insurance policy in place, and (iii) who suffered the loss for which they are issuing the cheque. If you can prove to the insurance company that the entire loss for which the cheque is issuing was sustained by you alone AND that either you were the person paying the insurance premium under the policy or the insurance premium was being paid by the tenant for your sole benefit (e.g. if this was a provision of the lease which the tenant had and which you could show to the insurance company), then in those circumstances, the insurance company should issue the cheque in your sole name.
If the insurance company will not issue the cheque in your sole name, your options are:
(i) locate the tenant if possible and have the tenant endorse (sign the back of) the cheque for you so that you can lodge it to your own bank account, OR
(ii) sue the insurance company for breach of contract (their refusal to issue the cheque in your sole name, thereby preventing you from recovering that which you are contractually entitled to recover under the insurance policy).
If you are left with no option but to sue the insurance company, then you should be successfull to the extent that you can prove that the loss incurred was sustained entirely by you and not by the tenant and that you were insured for the loss. However, if only part of the loss for which the cheque is issuing was sustained by you and the other part by the tenant, then in court proceedings against the insurance company, you would only be awarded that part of the total amount which relates to your portion of the loss (if all of the loss was sustained by you and none by the tenant, then clearly you would recover 100% of the amount, and this is why the insurance company in that instance would agree to issue the cheque in your sole name).
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The bank is not obliged to accept the cheque. There may also be restrictions on the cheque such as "account payee only". This would cause quite a difficulty for you as of course you do not have a joint bank account with the former tenant; therefore the only solution would be to get the insurance company to issue the cheque in your sole name. The insurance company might be willing to do so if the tenant were to give a letter instructing the insurance company that the cheque is to be made out in your sole name; I cannot see why the insurance company would refuse to do so then. If you do not have success with getting the insurance company to issue cheque in your sole name, then you may have little alternative but to sue the insurance company on foot of the insurance policy. To be successful you will need to show that you are insured under the policy, that you paid the premiums on the insurance policy or that they were paid by the tenant for your benefit, that you incurred the loss which is covered by the insurance policy and that you have not received payment under the policy for the sole reason that the insurance company will not make out the cheque in your name. If all of these things can be shown by you, then you will be successful in obtaining an order in court that the insurance company issue the cheque to you for the amount of your loss which is covered by the insurance policy, as described in my answer above.
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