Escrow is a legal concept describing a financial agreement whereby a third party holds an asset or money on behalf of two other parties that are in the process of completing a transaction. Escrow accounts are managed by the escrow agent. The agent releases the assets or funds only upon the fulfillment of predetermined contractual obligations (or upon receiving appropriate instructions).

For Monitored Insurance Claim checks, mortgage companies will deposit the property owners' funds in an escrow account while they review the progress of the reparations and any additional requirements that should be met to guarantee the property is restored to its original value, before releasing the funds for the claim check. Payments are usually released through partial draw checks after scheduled inspections to verify reparation progress and/or completion.