At some point or another, we'll all deal with damage from a car accident. When that happens, one of the first things to do is contact your insurer. You'll be assigned an adjuster who will work with you to determine how much it will cost to fix the damage. Once that process is complete, you'll be told how much your insurance will issue to pay for repairs to your vehicle. You then get a check for either the cost of repairs or the value of your car if it's worth less than the cost of repairs. From there, you decide when and where you'll get the car fixed.
Whether or not you will get to to keep any remaining balance on an insurance check will largely depend on whether or not you own your vehicle or lease it.
The Adjuster's Review
You don't want to repair your car until your insurer signs off on the cost. The adjuster may come out, review the damage and quote you what he thinks it will cost. Alternatively, he may recommend you take it to an insurer-approved shop for a repair quote. If you don't use the recommended shop, you may have to get several quotes so that the insurer knows you aren't padding the cost estimate.
The Check's in the Mail
You may be in a hurry to get your car fixed, but the insurance company has its own timeline. There are state laws specific to how many days an insurance company has to issue payment. In California, for instance, payment must be made within 15 days of accepting the claim. If there's no dispute over the payment, most companies try to get the check to you in a month or less. The insurance company does not have to wait until you've made the repairs to issue payment, so don't assume you have to rush your car into the shop.
Getting the Necessary Repairs
Once the adjuster approves the repairs, you can give the mechanic the go-ahead to start work. Some state laws spell out your right not to spend money on repairs. If you have a car loan, though, you likely have listed your lender as a loss payee. That means when they send you the check, it will also be in your lender's name. You'll have to get your lender to sign off on it before you can deposit the funds. Naturally, your lender will take issue if you plan to pocket the money and drive your damaged car all over town. For that reason, you can expect to show proof that you've had the repairs done before you can deposit the check.
Pocketing the Remainder
After you've received your check, shop multiple reputable repair shops to get the most affordable rate. If you have a friend who will do the repairs on the cheap, go for it. The good news is that if there's any left over, you can keep the difference. So if you took your car to the dealership and they quoted $8,000 in repairs, but you found someone who would do it for only $5,000, that's $3,000 extra in the bank.
The Possibility of Complications
It can take longer to get your money if there's a disagreement over the amount. The adjuster may not accept the repair shop estimate, for example. If another driver is involved, his insurer may insist he wasn't at fault and refuse to pay. If you have to go to court to get paid, you may not see any money until long after the repairs are done. If you think the company's trying to cheat you, report it to your state's auto insurance commissioner.
- Insure.com: How Long Until I Get my Insurance Money?
- Insure.com: What to Do After a Car Accident That's Not Your Fault
- California Department of Insurance: Fair Claims Settlement Practices Regulation
- Insurance Information Institute. "Faqs About Direct Repair Programs and Generic Auto Parts." Accessed Oct. 18, 2020.
- Insurance Information Institute. "Determining Your Car's Value and Cost of Repair." Accessed Oct. 18, 2020.
A Durham, NC resident, Fraser has written about law, starting a business, balancing your budget and fighting evictions, among other legal and financial topics.