How to handle a lost cashier’s check

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Cashier’s checks are a reliable form of payment, since they’re paid for upfront and won’t bounce. However, that can make it more complicated if you lose one of these checks. Since it was already paid, the bank can’t cancel a cashier’s check. You’ll need to file a claim or purchase an indemnity bond instead to get it reissued.

Here are the steps to take if you lose a cashier’s check and how you can expect to replace it.

What is a cashier’s check?

A cashier’s check is a form of payment issued by a bank or credit union on behalf of a customer. Unlike a standard check, the value of a cashier’s check is paid upfront. That means the check won’t bounce since it has already been paid for when it’s deposited and is backed by the bank’s funds rather than the payer’s.

Some merchants or vendors may not accept personal checks but will accept cashier’s checks since there’s less risk of the check being counterfeit or bouncing.

What to do if you lose a cashier’s check

Losing a cashier’s check is much different than losing a personal check. Since the cashier’s check was paid for upfront, the bank usually can’t put a “stop payment” on the check. Instead, you have to follow a few steps to get the check reissued.

The first step is to contact the bank that issued the lost check. If you’re the recipient of the check and don’t know which bank issued it, you may need to get in touch with the payer to find out which bank they bought it from.

The bank will ask you to fill out a “declaration of loss” statement. This statement is a legal claim declaring that you lost a check. However, the declaration of loss is not enforceable until 90 days after the check was issued. That 90-day window exists to give some time for the check to be found.

If the check is still lost after 90 days, the original check is essentially voided, and the bank will reissue the cashier’s check.

Need the check payment before 90 days are up?

Sometimes, you might not be able to wait 90 days to send or receive the check payment. In that case, the bank will likely require you to purchase an indemnity bond to receive a replacement check.

An indemnity bond is a type of insurance that makes you (the claimant) responsible for the lost check, rather than the bank. It protects the bank from getting scammed or simply having to pay for multiple checks. So, if the lost check is found and cashed in after you’ve already received a replacement check, you’re liable for paying back the bank for the original check that was found.

The cost of an indemnity bond will vary depending on the insurance broker and your credit score. Typically, the bond will cost somewhere between 1 to 15 percent of the check amount.

Bottom Line

Cashier’s checks are a secure form of payment, but losing one can be a complicated process. It’s important to immediately contact the bank and fill out a “declaration of loss” statement. If you can’t wait 90 days for a replacement check, you may need to purchase an indemnity bond.

Remember, if the lost check is found and cashed in, you’ll be responsible for paying back the bank. It’s important to take the necessary steps to protect yourself and your finances when dealing with a lost cashier’s check.

–Bankrate’s Sheiresa McRae Ngo updated this article.