Do I have to repair my car with an insurance check?


No, not necessarily. If you own the car and your policy doesn't require you to use your check towards repairs, then the money is yours to spend however you choose.

Anna SwartzKara McGinley


Anna Swartz

Anna Swartz

Managing Editor & Auto Insurance Expert

Anna Swartz is a managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.

 & Kara McGinley

Kara McGinley

Editor & Licensed Home Insurance Expert

Kara McGinley is an editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

Updated  | 4 min read

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If you recently got into a car accident, or your car was damaged in a separate scenario like if a tree fell on it, and your auto insurance company came through with a claim check to cover the damages, then congrats! Your car insurance worked just like it’s supposed to.

But now you may be wondering if you have to use that check on the repairs, or if you have the option of just keeping the money and living with the damages, or trying to fix your car on your own. The answer depends on whether or not you own the car outright.

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If you have an existing loan on your car, the check must go directly toward auto body repairs, but if you own the car outright, you may be able to spend the insurance money on whatever you choose, depending on how your insurer paid out the claim. 

Key Takeaways

  • Some insurance companies send the claims check directly to the auto repair shop, which means you wouldn’t be able to pocket the money

  • If you lease or finance a car, your lessor or lienholder will likely get to sign off on how you use the claims payout

  • The only time you can just pocket the claims money is if your state and insurance policy allow it, and typically only if you own your car outright

When do I have to use an insurance check for car repairs?

Pocketing the payout from an insurance claim may seem tempting, but it’s not always an option. In many scenarios, you won’t be able to keep the money yourself, and in some cases, doing so would actually constitute fraud. You should always check your policy requirements when it comes to how you will be paid out in the event of a claim. Here are some scenarios when you cannot keep the claim check for yourself. 

1. When your insurer sends the check directly to an auto body shop

Some insurance companies won’t send you the claim check directly, they may require that it go straight to a repair shop as a way of ensuring you’re using the money for repairs. During the claims process, your provider may give you the option of choosing one of their preferred repair shops or picking your own.

Your provider may make it a little more difficult for you to choose your own auto body shop by requiring you to get multiple appraisals, meaning it’s usually easier to go with one of their preferred vendors. If you go with an auto body shop your provider has a relationship with, your provider will likely pay the shop directly.

2. When you have a lease or loan on your car

If you don’t own your vehicle outright and instead lease it or have a car loan, then the decision about whether or not to keep the money from an insurance claim may not be yours to make. It’s likely that your loan or lease company is also a named insured on your policy, and the check from an insurance claim may be made out to both you and the company, so you’ll need them to sign off on the repairs before you cash the check.

Your lender’s involvement will vary depending on the company, but they may require that you use the check for repairs and send them documentation proving that you followed through.

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When can I keep the check and not fix my car?

If you own your car outright and your insurance policy doesn’t specifically require that the claims check go to your auto body shop, then the money from a claim is yours, and you can basically do whatever you want with it. Your insurer fulfilled their responsibility to you by paying out the claim, and, as long as your policy and your state’s laws allow it, you can keep the money for other uses.

If the damage to your car was just cosmetic and you’d rather spend the money for repairs on something else, you might choose to do this. As long as you’ve met your policy’s requirements, it’s not fraud for you to keep the money. However, it’s not always the best idea.

There are few things you should consider before deciding to keep the money.

  • Once you’ve already claimed damage, you can’t claim it again, even if you don’t use the resulting money on repairs

  • Claiming the same damage again on a future accident can get you charged with fraud

  • Not making repairs so you can use the claims money elsewhere could also mean gambling with your safety

Even if you think the damage to your vehicle from an accident or incident isn’t that bad, it’s still important to get confirmation from a professional before you decide to just live with it or attempt to repair it yourself. There could be more serious damage than you realize, which might wind up costing more money and headaches down the line if you don’t fix it now.

What if the insurance check is more than repairs?

In short, yes, you do get to keep the money if the check ends up being more than repairs. That said, since the insurance company typically cuts you a check after the auto body shop, claims adjuster, or appraiser inspects the damage and gives them an estimate, odds are the leftover money from the check will not be that much. However, you do not have to return that money to the insurance company.

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Frequently asked questions

When a car is totaled, who gets the check?

If your car is totaled (and your policy includes comprehensive and collision coverage) you’ll pay your deductible and then your insurer will pay you the value of your totaled car. You’ll probably get what’s called the actual cash value, meaning depreciation is factored into your reimbursement. If you still owe money on your car or it’s a lease, the check may go directly to your lender or lessor, and if the value of your car is less than what you still owe, gap insurance can make up the difference and pay off your loan or lease.

Is it fraud if I don’t use the claim money to repair my car?

Laws and regulations regarding car insurance claim checks may vary from state to state. If you lease or finance your car, pocketing the claim money may be considered fraud. However, if you own the car outright and the insurer sends your claims check directly to you (not an auto body shop), then the check is yours and you can use it how you want. Keep in mind that not making necessary repairs to your vehicle may be unsafe (and even illegal depending on the severity of the damage), and claiming the same damage again on a future claim would be considered fraud.

What if the insurance check is less than repairs?

If you don’t believe you received the payout that you deserved, contact your insurance claims department. Try to provide as much documentation of the before and after from the damage. You may also want to consider hiring an independent appraiser to get an additional quote for the repairs, which you can then bring to your insurer to help make your case.