What if you don’t use insurance money for repairs?
Can you just keep the cash from an auto insurance claim payout and not put it toward repairing your car? First, that depends on whether or not you fully own your vehicle. If you don’t fully own your car, the insurance check is often made payable to both you and the lender or repair shop, which can limit how the funds are used.
If I own my car, can I keep the money from an insurance claim?
If you own your car outright, you can choose to not repair your vehicle for financial reasons, or delay repairs with the money you receive from an auto insurance payout. However, driving an unrepaired, damaged vehicle could violate state safety laws or inspection requirements, depending on where you live.
If your vehicle is in any way unsafe, it’s wise to use your payout to fix the problem. And, if you do not make repairs immediately, your vehicle may end up incurring additional damage. That additional damage will likely not be covered by your auto insurance because if it was a direct result of not using your initial payout to make the needed repairs.
If I don’t own my car, can I keep the money from an insurance claim?
If you’re still making payments on your vehicle or leasing it, your lender or leasing company likely has a say in how your insurance payout is used. In most cases, the check is made payable to both you and the lienholder. That means the funds may be sent directly to the repair shop or require both parties to endorse the check, ensuring the money goes toward fixing the vehicle.
Because the lender has a financial interest in the vehicle, they want to make sure it retains its value. Skipping or delaying repairs could violate your loan or lease agreement and even result in the lender demanding full repayment or taking other actions to protect their investment.
What if I get overpaid on a claim? Can I keep it?
While rare, overpayments from an insurance company can happen—especially if the damages were overestimated or repairs came in under budget. However, keeping extra funds from an insurance claim could be considered unlawful if you misrepresent repair costs or damages to inflate a payout, especially if the discrepancy is discovered later during an audit or claim review.
If you suspect you’ve received more money than necessary, it’s best to contact your insurance provider and clarify the situation. Returning the excess not only helps you stay on the right side of the law but also protects your credibility for any future claims you may need to file.
Am I able to do the repairs myself and keep the check?
Yes, if you own the car outright, you can usually perform the repairs yourself. This approach may appeal to DIY enthusiasts or those with access to discounted parts or labor. However, make sure your insurance provider knows you’re opting for self-repair, and be aware that they’re unlikely to cover poor workmanship or future damage resulting from incomplete or improper fixes.
Additionally, if you plan to eventually sell the vehicle, consider that a professional repair job may be more appealing to buyers and could help preserve the car’s resale value. And if your state requires a post-repair inspection for safety or registration purposes, you’ll need to ensure your work meets legal standards.
Can I keep a totaled car?
If your vehicle is deemed a total loss, or totaled in most states, the insurer will take ownership of it in exchange for the full payout. However, you can often request to keep it by accepting a lower settlement and applying for a salvage title.
Unlike getting a few dents in your back door and deciding that you’d rather have the money than get those dents banged out at a body shop, if your car is deemed a total loss (even if you feel it’s still road-worthy) you will not receive your payout unless you give up your car. There are a few states that will allow you to retain a salvaged vehicle if you pay the salvage value to the carrier, but you’d need to obtain a salvage or rebuilt title in that case.
Your insurance experts at Answer Financial recommend that in all cases, you should use the money from a car insurance payout wisely. If your car is in need of repair, it’s wise to fix it immediately to help keep others and yourself safe on the road.
June 6, 2025
I was rear ended last week. The person who hit me had insurance and their adjuster is telling me I must find a shop and they will only pay the shop and not make a cash settlement directly to me. The car is old and I am not sure I want to sink several thousand dollars into it. Can I demand a cash settlement here in California?
My insurance company sent me a check just in my name after they estimated my vehicle it was for $4,000…. I sent it to one shop they ended up estimating the damage after tear down that it was over $11,000 in damage…. the insurance company didn’t want to pay that out to that company because they didn’t work with that shop directory.. so the car was taken to a bigger shop that they work with they ended up estimated it to be a total loss… so they stated they were giving me $16.700.. for the vehicle but I have a lien holder because my car is financed…. but the big question is I had already cashed that $4,000 check that was made out directly to me. Do they deduct the money from that 16,700 or do I have to give that money back??
We wrecked our car, turned in estimate to insurance company who took a while but we finally received money to fix from estimate turned in. they sent money direct to us can we take it to a different repair shop now, while waiting on them to pay out we found a place to do it cheaper
When your check from an insurance company is worth more than the amount to fix your car, who keeps the balance. You, the body shop, or split?
Remember when you asked your father for 5 dollars and all he had was a 10 dollar bill, well he might have told you to bring back his 5 dollars change but you never did and he did not expect you to either…..get my drift ?Negotiate your repair bill with your shop and have the check sent to yourself, what ever the repair shop receives they will spend it all and justify it later, just like you did with the 10 dollar bill.
I am financing my car and have around 12,000 left to pay. A deer ran into my car and they estimated the damage to be $3,690. Once they send me the check do I have to repair the car or can I let that car go and use the money from the check to get another vehicle. I lost my good paying job so that’s why I’m considering letting this car go and using the money to get another one. Is it legally possible?
Your insurance will still do a payout if you keep your car. They will deduct salvage value off of your final check.
I bought my Toyota new 12 years ago. Today 230,000 miles. I am the original owner. Hit and run driver rear-ended car and caused damage to the rear bumper, but car is drivable and very sound. My Insurance Company paid me $3000 under UMPD. Another $500 in damages and they would have had to Total car. Should I trade in my car to dealership and use the $3000 check as a down payment? NADA value is $3500 -$4000. The car will need a $1200 Catalytic Converter later this year to pass State emissions.
Does this apply in nys
Does this apply to Utah? Also does it apply when its the other cars fault and there insurance is going to be the one to pay out. I want to use the money for the minimal body damage to repair the engine repair. (Engine is an unrelated issue)
I had a kitchen fire 3 years ago. I have 2 checks totaling over $27,000 to do repairs. Haven’t been able to leave home to go stay at motel for a month while repairs are done. Checks are issued to me and a repair company.(company came & did an inspection of home after fire)
I sold the home in a quick sale,as is I am not going to do the repairs. Insurance company cancelled my home owners insurance after they paid the claim.Can I keep the checks since the repairs won’t be needed? Please advise. Thank you.
Someon e hit my car while I was not in it. The scratches and dents are worth 2,500 . Can I keep the money and have it repaired another time?
What if I keep the auto insurance payout money without repair. Later, my car is totaled with another accident,will insurance company have the right to deduct the first payout amount from the 2nd accident payout( if car is totaled)?
Thanks,
Sharon
In general, an insurance payout is based on returning your vehicle to the state it was in when an accident occurred. So if there is existing damage to the vehicle at the time of the accident, an adjuster will factor that into the claim. As always, the best source of information on specific claim issues is your insurance company and/or agent.