What If You Repair Car Cheaper Than Insurance Estimate?

If you recently got into a machine accident, or your car was damaged in a split scenario like if a tree barbarous on it, and your automobile insurance company came through with a claim check to cover the damages, and so congrats! Your car insurance worked just similar it's supposed to.

But at present you may be wondering if you lot take to use that check on the repairs, or if you take the choice of just keeping the money and living with the amercement, or trying to fix your automobile on your own. The answer depends on whether or not you own the car outright.

If you lot take an existing loan on your automobile, the bank check must go directly toward auto body repairs, but if you own the car outright, yous may be able to spend the insurance money on whatever you cull, depending on how your insurer paid out the merits.

Central Takeaways

• Some insurance companies send the claims check direct to the auto repair store, which means you lot wouldn't be able to pocket the money

• If you charter or finance a machine, your lessor or lienholder volition likely get to sign off on how yous utilize the claims payout

• The merely time yous can just pocket the claims money is if your state and insurance policy allow it, and typically only if you own your car outright

When do I have to use an insurance cheque for machine repairs?

Pocketing the payout from an insurance claim may seem tempting, but information technology'due south not always an option. In many scenarios, you lot won't be able to keep the money yourself, and in some cases, doing and so would really constitute fraud. You lot should e'er cheque your policy requirements when information technology comes to how you volition exist paid out in the event of a claim. Here are some scenarios when you lot cannot keep the claim check for yourself.

one. When your insurer sends the check straight to an car body store

Some insurance companies won't send you the claim check directly, they may crave that it get straight to a repair store equally a manner of ensuring you're using the money for repairs. During the claims procedure, your provider may requite you the option of choosing one of their preferred repair shops or picking your own.

Your provider may brand information technology a little more difficult for you to choose your own car body shop by requiring you to get multiple appraisals, meaning it'south unremarkably easier to go with i of their preferred vendors. If you become with an auto torso store your provider has a relationship with, your provider will likely pay the shop directly.

two. When you have a lease or loan on your car

If you don't ain your vehicle outright and instead lease it or have a car loan, then the conclusion most whether or not to continue the money from an insurance merits may not exist yours to make. Information technology's likely that your loan or lease company is also a named insured on your policy, and the check from an insurance merits may be made out to both you and the company, and so y'all'll need them to sign off on the repairs before you cash the check.

Your lender'southward involvement will vary depending on the visitor, only they may require that you use the bank check for repairs and send them documentation proving that y'all followed through.

When can I keep the check and not fix my machine?

If you own your car outright and your insurance policy doesn't specifically require that the claims check go to your auto body shop, so the money from a claim is yours, and you can basically do any yous want with information technology. Your insurer fulfilled their responsibility to yous by paying out the merits, and, every bit long as your policy and your land's laws allow it, you lot can proceed the money for other uses.

If the damage to your motorcar was just cosmetic and yous'd rather spend the money for repairs on something else, yous might cull to practice this. Every bit long as you've met your policy'southward requirements, information technology's non fraud for yous to keep the money. Nonetheless, it'south not always the best thought.

There are few things you should consider before deciding to keep the money.

• Once yous've already claimed damage, y'all tin can't claim information technology once again, even if you don't use the resulting money on repairs

• Claiming the same damage again on a future accident can get y'all charged with fraud

• Not making repairs so you can use the claims money elsewhere could also mean gambling with your safety

Even if y'all think the damage to your vehicle from an accident or incident isn't that bad, it's notwithstanding of import to become confirmation from a professional before y'all decide to just live with it or attempt to repair information technology yourself. At that place could be more serious damage than you realize, which might wind upwardly costing more money and headaches down the line if y'all don't set up it now.

What if the insurance cheque is more than repairs?

In short, yes, you practise get to keep the money if the check ends up being more than repairs. That said, since the insurance company typically cuts you a check after the auto body shop, claims adjuster, or appraiser inspects the damage and gives them an estimate, odds are the leftover money from the cheque will not be that much. Nonetheless, you practice not have to return that money to the insurance company.

Frequently asked questions

When a car is totaled, who gets the check?

If your machine is totaled (and your policy includes comprehensive and collision coverage) yous'll pay your deductible and and then your insurer will pay you the value of your totaled car. You'll probably go what'south chosen the bodily cash value, meaning depreciation is factored into your reimbursement. If you still owe money on your machine or it'south a lease, the check may go direct to your lender or lessor, and if the value of your motorcar is less than what you still owe, gap insurance can make upwards the difference and pay off your loan or lease.

Is information technology fraud if I don't use the claim money to repair my machine?

Laws and regulations regarding car insurance merits checks may vary from state to state. If you lease or finance your car, pocketing the claim coin may exist considered fraud. However, if you ain the motorcar outright and the insurer sends your claims check directly to you lot (non an auto body shop), and so the check is yours and you can employ it how you desire. Keep in mind that not making necessary repairs to your vehicle may exist unsafe (and even illegal depending on the severity of the damage), and claiming the same damage again on a time to come claim would exist considered fraud.

What if the insurance check is less than repairs?

If yous don't believe you lot received the payout that yous deserved, contact your insurance claims department. Try to provide equally much documentation of the before and after from the damage. Yous may also desire to consider hiring an contained appraiser to get an additional quote for the repairs, which you can then bring to your insurer to assistance brand your case.

Anna Swartz is a managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well equally an associate writer at The Dodo.

Kara McGinley is an editor and licensed home insurance good at Policygenius, where she writes most homeowners and renters insurance. As a announcer and as an insurance expert, her piece of work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

Source: https://www.policygenius.com/auto-insurance/do-i-have-to-repair-my-car-with-an-insurance-check/

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