Getting an insurance claim check in the end can be a great relief when dealing with the aftermath of a car accident. Depending on your situation, you may receive checks made by third parties, such as you, your bank or lease company. If you are repairing your car at a store recommended by your insurance company, you may not see a check at all. You can send your payment directly to the store. How to best navigate the situation depends on the name of the check and the extent of the loss.
When will I receive a request for a car insurance claim?
If you file a car insurance claim against something covered within the scope of your insurance contract, you may obtain a check to cover the costs associated with the claim (excluding applicable deductions). After submitting your claim, your billing agent or adjuster will let you know if the accident is covered and if you are eligible to pay the insurance.
There is a possibility that the way to cash out your claims check and when it may be in the grey area, especially since there are no always instructions that explicitly state how to use your check. There are multiple ways to handle claim checks, but they are usually created for interested people who are insured with the vehicle. This may mean you, you, you, or you and your bank only. Alternatively, the insurance company can send payments directly to the repair shop.
Here’s what to do in each scenario:
If the check is made to you
Of all the ways you can receive your bill checks, writing it directly onto you is the easiest and most control over how you spend your funds on you. This happens when your vehicle has not lost its lease or loan, and when you choose your own repair shop.
When a car is considered a total loss, many drivers direct insurance checks to buy a new car. This is what Bankrate analyst Greg McBride did after his teenage son added up his car.
“One morning, on my way to work, I met an insurance adjuster in the car park at Home Depot,” says McBride. “He handed me a check and my son used it when he bought his next car.”
Depending on the severity of the damage and the availability of your local repair shop, there may be delays in completing the repair even with funds.
“After struck a bear last year, we had to file a comprehensive claim,” says Bankrate editor Amelia Buckley. “Don’t worry, it looked like the bear was fine.”
If the check is made to two parties
After an approved claim, you may receive a written check and an agreed body shop. Auto insurance companies may issue two-party checks to ensure that the funds are used only for intended repairs. However, the check is not always written to you and the repair shop. In situations such as total losses, the check will be written to you and your lender (also known as a lien) and you are expected to use the money to help you repay your car loan.
Alternatively, if you co-own a vehicle, you may receive a check that was made by you and others. This is common in married couples and adult children who helped their parents buy the car.
In either case, you can determine what to do with two party checks by checking whether the name contains “and” or “or”. If “or” is present, the check should be able to be cashed out alone. If your name is added to “and”, you may be expected to sign a check and complete the repairs at a named body shop.
If the check is made to the lien
If you and your car loan provider are made to you and your car loan provider in total vehicles, you may not be able to access funds from your checks yourself. As both names are included, the check will need to be approved by you and your lender.
To begin the process, you must send a check to your lender for a proper signature. The funds can then be applied to your car loan, as did Bankrate Editor Suzanne de Vita. “I didn’t have much left on the loan,” says De Vita.
But what if the vehicle hasn’t been added up and can be repaired? Receiving a two-party check for repairs can be a bit of a burden. You must sign a check with LEENHOLDER (or, if the lease holder is a lease)
Typically, the process would look like this:
- Send a check to the lien.
- I’ll have the vehicle repaired.
- Once repairs are complete, take your vehicle to the dealer and ask your representative to inspect the repairs and sign off.
- Send a statement from the dealer to the lien and repair the invoice and photos.
- Wait for the lien to review your documents, sign off your check, and send it back to you.
- Cash your check and pay when you receive the repair shop.
Can I maintain my car insurance check?
Using a full insurance check for car repairs is an obvious choice for your payment, but it is not necessarily the only option. However, determining whether payments are available for other purposes depends on several factors that are primarily linked to the way the check is issued.
If the check comes from a third party request
Generally, you are most flexible when your car’s insurance check comes from another responsible insurance company. For example, if you have an accident without a disability and other driver insurance involved has issued a check to resolve the claim, you may be able to independently decide how to use the money. You probably need to view a repair estimate before you get paid.
If you are leasing your vehicle or have a loan, please note that the lien may have regulations on how to use the check and require evidence that the damage has been repaired. And if your vehicle is summed up and you have received a check of the loss, you are responsible for paying the money paid to them to your lender.
If the billing check exceeds repairs
In some cases, billing checks may exceed the total cost of repairs required for your vehicle. What happens with extra funds depends on the events of the check. Sometimes your car insurance company may require proof of repair. In that case, the check may be made up to the specified amount for both you and the approved car repair shop. Repair shops are usually expected to complete repairs according to the quotation assigned. If you have the remaining funds, the difference is usually insignificant.
Instead, you may be able to maintain the difference if you decide to go to an independent repair shop and the total cost of repairs is less than the billing checks made to you. However, you cannot claim the same damage multiple times, so it is essential to ensure that all necessary repairs have been made. If there is a difference between claim checks and repair costs, it may be worth double checking that your vehicle has been fully repaired according to your insurance company’s claim agreement.
Does my condition determine what I can do with my claim check?
All states have their own insurance regulations, including how to pay your claim, the timeline for claim decisions and payments, and requirements to contact policyholders about their claim status. In some states, such as Massachusetts, you can make direct billing payments to the insured in the form of a check. However, the cost of claim checking is usually determined by each carrier.
Please note that if you decide to maintain your money instead of repairing your vehicle, you cannot make another claim for the same damage. Additionally, if the adjuster can know that there has been existing damages, it may be denied a future claim.
