Keeping the insurance claim money isn't fraud if you own the car and the insurer sends you the claim check instead of sending it to your repair shop. If you have a loan or lease for your car, you can't choose to spend the insurance payment on something else and not repair the vehicle. If the damage to your car is strictly aesthetic and doesn't affect the 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. When a car is damaged in an accident, its value decreases. This is a factor that many accident victims in Georgia don't think about when filing a compensation claim.
It's not the same as financial recovery from the damage itself. The final determination of what the at-fault driver's insurance company pays for your car almost always involves a negotiation between you and the insurance adjuster. Check with the dealer and review your sales contract or lease agreement, as supplemental insurance is sometimes sold as an add-on when you buy or lease a car. In these types of situations, it can be especially helpful to have purchased rental car coverage under your own car insurance policy.
If repairs do not return the car to its original condition, it will suffer what is called a “decrease in value”. No one should give a recorded statement to an insurance company, not even to their own insurance company, without first consulting an attorney. In other words, supplemental insurance protects you from having to pay more for your loan than your car is worth. Ideally, the insurance company should take care of the rental of the car so that all you have to do is pick up and return the rented car.
If you have collision coverage through your own car insurance, your insurance company will pay for the repair, replacement, or rental of the vehicle and then request reimbursement from the at-fault driver's insurance company. Technically, GAP is short for “secured asset protection,” but it's commonly referred to as gap insurance because it helps pay for the “gap between what you owe for a car and what it's currently worth.”. Use all of this information to argue your case to the appraiser and point out that other similar cars have a higher value than what the insurance company offers you. Unlike what happens with your own coverage, there is no fixed time limit on how long the at-fault driver's insurance company has to pay for the rental of the vehicle while the vehicle is being repaired.
In other words, if you have a budget sedan, don't rent a luxury car or van, or else the insurance company might refuse to cover the extra cost. 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. Finally, once the insurance company makes you an offer to pay the full price of the vehicle, you may have to return it even if you don't accept the initial offer. If you repair your car before the adjuster can inspect it, the insurance company may try to reduce the amount you're reimbursed by claiming that some of the damage that was repaired was already there before the accident.
Next, we'll discuss how and why the value of a car declines and why it matters when it comes to filing a reduced value car insurance claim...
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