As long as you're a full owner of your car, you can do whatever you want with the claim money you receive from your insurer. This means that you can keep the money left over from your claim. However, it's very important that you never intentionally overestimate the cost of repairing your car. Texas law says you must show proof that you can pay for the accidents you cause.
Most people do this when buying auto liability insurance. Liability insurance pays for the other driver's repairs and medical bills. If you still owe money for your car, your lender will require you to have comprehensive collision coverage to pay for damage to your car. If the damage to your car is strictly aesthetic and doesn't affect your vehicle's safety or drivability, repairs may not be your top priority.
However, you may be concerned that using payment for other things is considered insurance fraud. If you are the full owner of the vehicle, the short answer is no. However, there are a few other considerations to consider before cashing the check. If you have filed a claim with your insurance company for an insurable event that is covered, you may receive a claim check.
As good as it sounds, it's not just about saving money to take to the bank in most situations. In some cases, you may have to follow certain instructions for the funds, especially if you had financial obligations related to the claim, such as damage to the vehicle or medical expenses. This Bankrate article will help you understand what to do with an auto insurance claim check in a variety of situations. If you file an auto insurance claim for something that is covered within the scope of your insurance policy, you'll likely receive a check to cover the damages associated with your claim (minus any deductibles that apply).
When you file a claim against your auto insurance policy, you can “withdraw money” and receive money as compensation (minus the amount of the deductible) instead of having your insurer pay an auto body shop to fix your vehicle. Your car insurance policy doesn't contain stipulations about how to use your claim check, and since you're not particularly bothered by a few dents and a little bit of chipped paint, you decide to spend the money on anything other than fixing your car. Your insurer will deduct this previous damage if the vehicle is damaged in the same area or if the car is completely broken down. Even if you are the full owner of your car and your insurance company sends you a direct payment, you should check your policy before you decide to keep the money.
If the lien creditor allows you to keep the money and skip repairs, remember that these are now pre-existing damages that the insurer will consider if your car is damaged in the future. However, if your car is relatively new, any unrepaired damage may decrease its value if you file another claim with your insurance company, since they won't pay twice to have the same repairs repaired. If your policy includes “rental reimbursement coverage,” you'll pay for a car rental if your car was stolen or is being repaired because of an accident that your policy covers. Yes, you can keep the car insurance money because of a car accident, instead of using the money for repairs, if you are the full owner of your car and the insurance company didn't pay the mechanic directly.
Your car insurance company should not withdraw the money or consider it fraud if it doesn't use the insurance money to repair the vehicle. However, your lender or landlord's rules will apply to all insurance claims, regardless of the insurer involved. If your car isn't very reliable and you're not in the financial position to risk paying for repairs or replacing it yourself, it might be worth paying a higher upfront cost for protection through an extended warranty. If damage to your car causes other problems in the future, they won't be covered by the at-fault driver's insurance company or your own policy.
Depending on the details of your insurance policy, you may not have to use your claims settlement check to repair your car. .
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