You’ve had a car accident and been through the whole claims process. Now, you have a check in hand. That’s great news, but you also have a boatload of bills and that money would sure help get you out of debt. So, you’re wondering if you have to repair your car with an insurance check or if you can use the money for something else. The good news is that you may have some choices, depending on the type of check, the status of ownership of your car, and the amount of damage it sustained.
This article clarifies when you must use your insurance check to repair your car and when you might be able to use the money for more urgent needs.
Is the Check Made Out to You?
The first question to answer is whose name is on the check. If you outright own your vehicle then the check is likely made out to you alone. This is great news. If you are willing to forgo the repairs because they are not major, or because you just don’t have the time to go through the repair process, you can make that choice and keep the money for other uses.
Is the Vehicle Financed or Leased?
If the vehicle is currently under a loan or lease this means that someone else has an interest in having the car repaired. In this case, the check is usually made out to you and the lender or leasing company. Sometimes it is even made out to a specific repair shop that has bee pre-approved by the insurance company.
Your lender will want the car to be repaired as soon as possible to protect their interests. It’s up to you to get this done.
How Bad is the Damage?
If the damage is not too bad and if you are handy with car repair, you may decide to repair the car yourself and use the insurance claim money for other expenses. This only works if you own the car outright of course and when the check is made out to you alone.
What Kind of Coverage Are You Keeping?
Another consideration is whether or not you’re going to keep comprehensive or collision coverage after an accident and a claim. If so, you may be required by your insurance company to make the repairs and to show proof that you have done so. The reason for this is that insurance companies do not want to be in the position of fully insuring a car that already has damage that has not been repaired. If you do not make the repairs, your insurance company will likely make you drop any physical damage coverage from the vehicle.
If you’ve been in an accident and you’re not happy with your insurance company’s claims process, use the InsuranceWins form to shop around for a new carrier. You just may find better rates for better coverage with a company known for a fast and easy claims process.
