There is no worse feeling than being involved in a car accident. Fortunately, most accidents are minor fender benders with a large majority of them causing nothing more than cosmetic damage.
If the check from the car insurance company arrives in the mail at your home, a light bulb may go off in your head: should I keep the money for other expenses or get my car repaired?
Is this something you are legally allowed to do? Should you make this decision if you have the opportunity? Let’s take a closer look at some of your options.
Take the Cash and Run
Listen up: if the check from the car insurance company is made out to you, you have the right to take the cash and run. Since it is legal to use the money however you see fit, you don’t have to run very far – you are not doing anything wrong.
Of course, you may not be this lucky. Many times, the insurance company will make the check out to the body shop that you have decided to work with. In this case, you have no choice but to let them do the work. Although you are not going to get your hands on any of the cash, at least your car will be repaired sooner rather than later.
Even if you do find yourself in position to take the money, you have to decide if this would be in your best interest.
First things first, how bad is the damage? If it is minor and you don’t mind living with it – at least for the time being – taking the money may best for you at the present time. This is particularly true if you have other financial needs, such as a rent payment that is due or college tuition that needs paid.
How much is your car worth? This is a good question to ask before making a final decision. If you have an old car that is already “beat up” it may not make good sense to take the money to make the repairs. Even if you do, is your car going to look that much better?
Will you Live to Regret Your Decision?
As tempting as it may be to cash out, you have to think about the long term consequences. For example, a car that goes unrepaired could lead to multiple safety concerns.
On the surface, the damage may look minor – just a few dings and scrapes. Unfortunately, there is a chance that something else could have been damaged and you just don’t realize it. Anything that you cannot see, such as the brakes, may have been damaged. In this case, you are taking a risk not having your car repaired by a qualified professional.
You Have Options
If the insurance company pays you direct, you have options. This is a good position to be in. Just make sure you make the right decision. No matter how tempted you may be to take the money, don’t do so until you are 100 percent positive that it is best for you and your vehicle.