If you've been in an accident that only caused cosmetic damage, you may be wondering if you can just pocket the insurance money. In many cases, what you do with the money is up to you, but there are a few things you need to be aware of.
Do You Own Your Car?
What you need to do in terms of car repairs after an accident depends on if your car is paid off, on a loan, or on lease. If you have a lease, you definitely need to use the car insurance money to get it fixed. If you don't, the dealership will charge you for the damages when you turn it in and insurance won't pay for those charges because they already paid for the damages.
If you still have a car loan you're probably supposed to get it fixed according to the terms of the loan. That's because the bank still has an interest in your car as collateral for the loan and you're supposed to protect the collateral. If you didn't get it fixed, they might not find out. However, if they did, it's possible they could say you were in default on the loan and make you pay it all off at once.
If you have a fully paid-off car, it's entirely up to you what you do with the car insurance money.
How Does The Insurance Company Decide What to Pay You?
If you're thinking about whether to fix your car or not, you may be wondering how the insurance company would decide what to pay you. Some insurance companies may still ask that you go get several estimates for repairs and then pay you based on those estimates. Other insurance companies may have their adjusters estimate the damage to your car and you could just accept that amount and cash the check.
What Happens To Your Insurance Rates?
The decision to repair the car or not repair the car won't change your insurance rates. The insurance company bases rates on the claims you file not what your car looks like. Leaving a dent in your bumper or getting it fixed doesn't change the fact that you got in an accident.
The exception might be if there is serious damage that might compromise the safety of your car. For example, you might pay more if you choose to not get your airbags reset after a crash and no longer have working airbags.
To learn more about how car insurance claims work, contact a local company today.
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