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Do I Fix My Car or Take the Insurance Money and Run?

August 31 2017 |
Posted in: NewsBody RepairTipsInsurance |

Sometimes, despite the bad luck of being in a collision, everything else works out well. First, no one was injured. Second, you made an insurance claim and, with just a quick inspection, they sent you a cheque to pay for the damage to your car.

But what if you need money for something else? Can you use the money you get from a car accident insurance claim to pay for something unrelated to the damage on the car?

Yes you can. In fact, the insurance company might even prefer if you used the money for something else. Sometimes the inspection doesn’t uncover all the damage. When you get your car fixed and the damage is discovered, it drives repair costs up even more.

So now you have cash in your hand and you can spend it however you like – with one exception.

If you took a loan to pay for all or part of the car, then you’re not the really the only ‘owner’ of the vehicle. Lenders, like the bank, will want the vehicle repaired because they must protect their investment. If you default on the loan, they will take back the car in payment. But if the car remains damaged, it won’t be worth as much to them.

Here are a couple other considerations before using your insurance claim money for something other than repairing the car.

1. The Nature of the Damage to the Car

If you’re going to keep driving the car, there’s some damage that should be repaired to make sure the car operates safely and in accordance with the law. Any damage to the car’s major mechanical components, suspension, wheels, tires, lights and safety equipment, like seatbelts and air bags, should be repaired.

2. Make Sure You Know the Full Extent of the Damage

Don’t rely solely on the insurance company’s assessment of the damage. They often will assess the repair costs at what it would take to make the car safe to drive, versus repairing absolutely all the damage. You should get an independent inspection at a trusted auto body repair shop (if you need any hints, give us a call!) that is not part of an insurance company’s DRP (Direct Repair Program). In most accidents, the damage you see is just part of the overall damage, so you need to know the full extent of the damage to get the full payout from the insurance company.

If you need any help in making an accident claim with your insurance company or you would like a fully-independent inspection to assess the damage to your car, please call us here at Leon’s.

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