Car Insurance Company Sent a Check to Cover Car Repairs Following Accident- Can I Pocket The Check?
If I was in a car accident and the insurance company sent me a check, can I fix the car myself and pocket the money?
This a very common question that we hear a lot. Let’s say you have been in a car accident and the insurance company has determined that your car is not a total loss and sends you a check for $10,000 to fix the damage to your vehicle. At this point it is very tempting to find someone to do the work for less and save the difference. You may even consider not fixing the car at all and pocketing the entire check. You want to know if this is a good idea. The answer to this question like everything else depends on whether you own the car outright, or have a lease or loan on the vehicle.
If I own my car outright, can I keep the check and not fix the car?
If you own the car outright, the insurance company sends you the check directly, your insurance policy does not require that the check go to a repair shop, and your state’s laws allow it, then you can decide what you want to do with the check. You can take the vehicle to be repaired at a shop, you can fix it yourself, or you can do nothing altogether, the check is yours to spend as you wish. Just please make sure that you are following your policy’s guidelines regarding this matter. You don’t want to be caught up in a fraud case.
It is important to note that there may be consequences down the line if you choose to skip the repairs and pocket the check. First of all, ignoring potentially necessary repairs is dangerous. You should always have the vehicle inspected before deciding to ignore cosmetic repairs. There could be underlying hidden problems that require resolve. Furthermore, if you do not get a qualified opinion, you may end up turning a minor problem into a major one and therefore, cost yourself more money and more problems down the line.
Another thing to note is that once you’ve claimed damage, you cannot claim that same damage again, even if you did not use the money for repairs.
If I own the car outright Can I repair my own car and pocket the check?
If you own your vehicle outright and you are not required to use an insurance approved auto shop, then yes, technically you can pocket the check and fix your own vehicle.
While this is one option, it may not be the best option for several reasons. First, it may affect your insurance coverage. By fixing the vehicle yourself, the insurance company has no way of ensuring that the repairs have been done correctly. If the insurance company is not confident in the quality of the repair work, that will cause them to question the integrity of your vehicle, the very thing you are asking them to insure.
Therefore, as a result, your insurance company may decline to continue providing you with comprehensive or collision coverage.
Second, the insurance company may decline to compensate you if additional damage is discovered during the repair or if the repairs were done incorrectly.
Lastly, if you get into another accident in the future, your insurance company may decline to pay for repairs to any damage done to the part of the vehicle that you previously repaired yourself.
In other words, while you can repair the car yourself, it might not be worth the small amount of money you will save in the long run.
What if you own a body shop or repair cars for a living? If you own an auto body shop and want to have the repairs done at your own shop, then you can discuss this with the insurance company ahead of time to see if they will approve your request. If you want to repair the car yourself, it would be very prudent of you to have the insurance adjuster look at the car and estimate the cost of damages so that you and the insurance company are on the same page and can avoid future misunderstandings.
If I have a loan/ lien/ lease on the car- can I pocket check?
If you do not own your car outright, chances are you will not have an option about what to do with the check for repairs. Many loan or lease companies are listed as a “loss payee” on your insurance policy, meaning, the loan or lease company can expect to receive reimbursement from the insurance company in the event there is a loss.
This means that the check from the insurance company may be made out to both the loan or lease company and the insured. If this is the case, then you will need to get approval for the repairs, from the loan or lease company, before you can cash the check. Some loan or lease companies may require you to go through one their approved body shops. Some loan or lease companies may request or require that you send them proof of repairs. Check your loan or lease agreement to determine your duties under these circumstances.
If you do not own the car outright due to a lien, then you likely will not be able to repair the car yourself for the same reasons your insurance company would not want you to repair the car yourself. Your vehicle is considered collateral and the financial institution has money on the line that they want to protect and preserve. The financial institution has no idea what quality of work you can provide or if you know what you are doing. Therefore, it is likely not a great idea to repair the vehicle yourself. While it may save you some short term time and money, it could end up costing you in the long run.
Will the insurance company pay for a rental car while mine is being repaired?
Yes, if you have purchased rental vehicle coverage. Review your policy before you rent a vehicle. Although policy limits vary, the company pays up to a specified amount per day for a specified number of days. The coverage ends when your vehicle is repaired, the loss is paid or after the specified period, whichever comes first.
If your vehicle is stolen, the policy may automatically provide transportation expenses. Again, review your policy to be sure. This type of coverage usually begins 48 hours after the theft and ends when your vehicle is recovered, the loss is paid or after a specified period, whichever comes first.
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