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Ask the Car Insurance Expert

Can I use my auto insurance claim check for expenses other than repairing my vehicle? I own the title to my car, and the repair work would just be cosmetic.

You don't have to spend the money on the car if the check is made out to you. But whether you should use the money for something else is another matter.

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If the damage truly is minor and cosmetic, it might make sense to use the money on more pressing needs than making the car look like new. Carefully consider, though, the long-term impacts of skipping the repairs. Will using the money now on something else dent the car's resale value?

Safety is another concern. You might not be able to see all the damage, and there could be trouble with critical parts, such as the brakes, wheels or even the engine. Driving the car without repairing it could make things worse and put you and your passengers at risk. Moreover, the insurance company will likely balk at paying for additional repairs that result from failing to fix the car in the first place.

If you repair the car right a way, a body shop can find any hidden problems, which can then be reported to the insurer. Typically an insurance company will pay for any additional necessary work. But if you delay repairs, only to discover the hidden problems later, it will be difficult to prove those issues resulted from the accident rather than from some other cause not covered by the policy.

For more, see Free money? Pocketing auto insurance claims cash rather than making repairs.

Last updated: Jul. 25, 2012
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