Insurance Payout: Do I Have to Fix My Car?
Is There an Outstanding Loan on the Car?
If you have a loan on your car, you will need to get the car repaired, usually by a reputable auto body shop approved by your insurer. This is because the car is the lender’s collateral until the loan has been paid, and the lender wants the vehicle to be in tip-top condition. In this case, paying for repairs with your insurance payout is a must.
Lenders are usually listed on auto policies as loss payees to ensure that you have full insurance coverage for the period of the loan.
As long as there is an outstanding loan on the car, it’s your responsibility to use insurance payout to repair your vehicle.
Do You Own Your Car Free and Clear?
Insurance companies are much more flexible if you own your car outright, and they won’t insist that you have your car repaired with the insurance payout, but the risk of not fixing the damage is enormous.
If you choose not to repair the car, the insurance company will no longer insure you for collision damage. This is perfectly reasonable: you may have a second collision that makes the damage worse, and they’ve already paid you once.
When you’re short of cash, it can be very tempting to use the insurance claim money on something more urgent, but can you really do without collision damage cover? You may be involved in a major collision, and the repair will cost a lot of money, or your car may even be totaled. This unfortunate situation could leave you financially worse off, or even without a car at all.
Even when you have the option of using your insurance payout for something other than fixing your car, it’s a good idea to have your vehicle repaired. It’ll be far less expensive should you have a second major collision, and your car will have a higher resale value.
Whether you’re paying for collision repairs yourself, or whether your insurance company is, call Orlando Auto Body at 480-418-4737 for a quote and professional advice.