Can you just keep cash from a car insurance payout and not fix your car?

Question of the Week:

Can you just keep the money from an auto or home insurance payout and not put it towards repairs?


This really depends on whether or not you fully own your vehicle or not. If you don’t completely own your car, then the answer to this question will most likely be no: money rewarded for repairs will go directly to your repair shop.

However, if you own your car outright, you can do whatever you wish with the money you receive from an auto insurance payout. Simply put, you do not have to use any of the compensation you receive from an auto insurance company on repairs. That said, here’s a few things that you should consider before making this decision.

First off, if your car or home has suffered major damage, most likely you’re going to need to fix it sooner rather than later. So even if you take your auto insurance payout and use it for something else, you’re still going to have to make the repairs eventually, so it might not make sense to wait. Also – and this should go without saying – if your vehicle or home is in any way unsafe, use your payout to fix the problem.

Another consideration, especially regarding home repairs, is that sometimes if you do not make repairs immediately, your property may end up incurring additional damage. That additional damage will almost certainly not be covered by your home insurance because it was a direct result of your negligence in not using your initial payout to make the needed repairs.

Finally, if your vehicle is deemed a total loss, you won’t be able to get your cake and eat it too. In order to receive your payout, in most cases your auto insurance company will possess your totaled car as a condition of its payout. Unlike getting a few dents in your back door and deciding that you’d rather have the money then get those dents banged out at a body shop, if your car is deemed a total loss (even if perhaps you feel it is still road-worthy) you will not receive your payout unless you give up your car.

Again, we strongly recommend that in all cases you use your auto or home insurance payout to make the repairs that the money was intended for.

To compare auto insurance quotes online visit, or if you prefer, call 1-800-258-5101 and have a licensed insurance agent walk you through your options, compare coverages and discounts, and help you through your purchase.


  1. mike scheier on September 27, 2016 at 12:03 pm

    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?

  2. Jerome on September 12, 2016 at 6:32 pm

    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??

  3. Joyce on June 24, 2016 at 6:02 am

    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

  4. david lafleur on May 8, 2016 at 4:19 am

    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?

    • master cylinder on August 15, 2016 at 4:05 pm

      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.

  5. Bill on June 6, 2015 at 12:19 am

    Your insurance will still do a payout if you keep your car. They will deduct salvage value off of your final check.

  6. Greg on May 29, 2014 at 12:55 pm

    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.

  7. wayne emerson on April 5, 2014 at 6:10 am

    Does this apply in nys

  8. Stephen Berry on March 20, 2014 at 11:33 am

    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)

  9. rob till on January 28, 2014 at 3:01 am

    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.

  10. patricia on July 21, 2013 at 7:03 pm

    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?

  11. robert on March 7, 2013 at 10:34 pm

    Do the insurance company check where you get your car fixed at after they send out the check

  12. Sharon on March 6, 2012 at 11:33 am

    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)?



    • Chad Catacchio on March 6, 2012 at 4:59 pm

      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.

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