I filed a claim on my auto insurance, do I have to have the car fixed?


Once you receive the check from the auto insurance company, the decision to have your car is basically at your discretion.

If you can live with the damage, then the insurance company will not run after you if you decide to just keep the money and spend it for other purposes. It's your car, after all. The insurance will just pay for the loss you incur as long as that loss is covered.

This applies whether it is your insurance company or the other party's insurance company that pays for claim. You are in the clear, unless the car loan still has not been fully paid.

Here are some considerations when you make this decision:

  • Your car was obtained through an existing car loan. Your bank will want to ensure that the loan they gave you for your car remains a "safe investment". They will want to know that the car does not considerably diminish in value as a result of the accident and your decision not to have it fixed. In most instances, the bank may request that you have the repairs made. You have the responsibility of notifying your bank about the damage your car has incurred. The same goes for cars that are owned by a leasing company.
  • Whether the damage is cosmetic or serious. You may decide not to get your car fixed if it is dented by hailstones since this will not affect how your car will run - just how good the car will look while you're driving it. On the other hand, if the damage is something serious (lost brakes!) that will affect how your car will run, it's a good idea to have your car fixed.
  • Whether it makes sense to have the car fixed. If you are already planning to get a new car and just sell your old car, you may just opt to get the proceeds of the insurance as additional funds for your new car. In this case, if you get your car repaired for $3,000 and stand to get an additional $2,000 when you sell your car, you will still be out $1,000, which doesn't make sense.
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