Will Insurance Take Back Car After Issuing Repair Check

If yous recently got into a car accident, or your automobile was damaged in a separate scenario similar if a tree fell on it, and your motorcar insurance company came through with a claim check to comprehend the damages, and so congrats! Your car insurance worked but similar information technology's supposed to.

Only now yous may be wondering if you lot have to use that cheque on the repairs, or if yous accept the option of just keeping the money and living with the damages, or trying to fix your car on your own. The answer depends on whether or not you ain the car outright.

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If you have an existing loan on your car, the check must go direct toward machine body repairs, but if y'all own the car outright, you may be able to spend the insurance money on whatever yous choose, depending on how your insurer paid out the claim.

Primal Takeaways

Some insurance companies send the claims check directly to the motorcar repair shop, which means you wouldn't be able to pocket the money
If you lease or finance a car, your lessor or lienholder will likely become to sign off on how you use the claims payout
The only fourth dimension you can merely pocket the claims money is if your state and insurance policy allow it, and typically only if you lot own your motorcar outright

When practise I have to use an insurance check for car repairs?

Pocketing the payout from an insurance claim may seem tempting, merely it's not always an option. In many scenarios, you won't be able to keep the money yourself, and in some cases, doing so would really found fraud. You should always check your policy requirements when it comes to how y'all will be paid out in the event of a claim. Here are some scenarios when y'all cannot go on the claim check for yourself.

1. When your insurer sends the check directly to an motorcar body shop

Some insurance companies won't send you the claim check directly, they may crave that it go directly to a repair shop as a fashion of ensuring yous're using the money for repairs. During the claims process, your provider may give you the option of choosing one of their preferred repair shops or picking your own.

Your provider may go far a picayune more hard for you to choose your own car body store by requiring you lot to go multiple appraisals, meaning information technology's usually easier to go with ane of their preferred vendors. If you go with an auto trunk shop your provider has a relationship with, your provider will likely pay the shop straight.

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

If you don't own your vehicle outright and instead charter it or have a machine loan, then the decision about whether or not to go on the money from an insurance claim may not exist yours to make. Information technology's probable that your loan or charter company is as well a named insured on your policy, and the check from an insurance merits may exist made out to both you and the visitor, then yous'll need them to sign off on the repairs before you cash the check.

Your lender's involvement will vary depending on the company, simply they may require that you lot use the cheque for repairs and send them documentation proving that you followed through.

Nosotros don't sell your information to tertiary parties.

When can I go on the check and not ready my auto?

If you lot own your machine outright and your insurance policy doesn't specifically require that the claims check become to your auto body store, then the money from a claim is yours, and you can basically do whatever you desire with it. Your insurer fulfilled their responsibility to you by paying out the merits, and, equally long as your policy and your land's laws allow it, you can go on the coin for other uses.

If the damage to your auto was only cosmetic and you lot'd rather spend the money for repairs on something else, y'all might choose to practise this. As long every bit you've met your policy's requirements, it's non fraud for you to keep the money. Yet, it'southward not always the best idea.

There are few things y'all should consider before deciding to proceed the money.

Once you lot've already claimed damage, yous can't claim information technology over again, fifty-fifty if you don't use the resulting money on repairs
Claiming the same harm once more on a time to come blow tin can get you charged with fraud
Not making repairs so y'all can use the claims money elsewhere could likewise mean gambling with your prophylactic

Even if you retrieve the damage to your vehicle from an accident or incident isn't that bad, it's still important to go confirmation from a professional before you lot decide to simply live with it or endeavour to repair it yourself. There could be more serious damage than you lot realize, which might wind up 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 than repairs?

In brusk, yes, y'all do get to keep the money if the check ends up being more than repairs. That said, since the insurance company typically cuts y'all a cheque after the machine body shop, claims adjuster, or appraiser inspects the damage and gives them an estimate, odds are the leftover money from the check volition not be that much. However, you do non have to return that coin to the insurance company.

Nosotros don't sell your information to third parties.

Often asked questions

When a car is totaled, who gets the cheque?

If your car is totaled (and your policy includes comprehensive and collision coverage) y'all'll pay your deductible and and so your insurer will pay you the value of your totaled machine. You'll probably get what's called the actual cash value, pregnant depreciation is factored into your reimbursement. If you however owe coin on your auto or it'due south a lease, the bank check may go directly to your lender or lessor, and if the value of your motorcar is less than what you still owe, gap insurance can make upwardly the difference and pay off your loan or lease.

Is it fraud if I don't use the merits coin to repair my auto?

Laws and regulations regarding car insurance claim checks may vary from state to land. If you lot lease or finance your car, pocketing the merits money may be considered fraud. However, if y'all own the car outright and the insurer sends your claims cheque directly to you (not an motorcar body shop), then the check is yours and y'all can apply it how you desire. Proceed in mind that not making necessary repairs to your vehicle may be dangerous (and even illegal depending on the severity of the damage), and claiming the same harm again on a future merits would be considered fraud.

What if the insurance cheque is less than repairs?

If you lot don't believe you received the payout that you deserved, contact your insurance claims section. Try to provide as much documentation of the before and later from the damage. You may as well want to consider hiring an contained appraiser to become an boosted quote for the repairs, which you can then bring to your insurer to help make 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 every bit an associate author at The Dodo.

Editor & Licensed Home Insurance Expert

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