Yes, you can cash an auto insurance claim check and do what you want with the money as long as you own the car outright and fulfill all legal requirements. If your car is leased or financed, the check will likely be made out to you and the lienholder, so you will need their signature before you can cash it. In this case, you will typically be required to use the money from the check to repair the car.
How To Cash an Auto Insurance Claim Check
- Get your lienholder’s signature if the car is leased or financed.
- Deposit the check with your bank.
- Check your insurance policy, loan, or lease contract to make sure that you are not required to use the money to pay for repairs.
Insurance Claim Check Cashing Tips
Unless the insurance company sends the claim check straight to the mechanic, you will usually have to cash it before you can use it for anything. If you own the car entirely and the check is made out to you, you can cash the check without anyone else’s authorization. In this case, you are generally free to keep the money.
Just bear in mind that certain types of repairs are legally required. For instance, federal law says that cars must have bumpers. You should be aware of safety concerns as well, since keeping the insurance money is not worth compromising a car’s structural integrity, brakes, or other important systems.
Car Insurance Claim Checks for Leased or Financed Cars
Claim checks for leased or financed cars can be difficult to cash since they are often made out to multiple parties. Plus, in most cases, failing to use the money to repair the car is a violation of your contract.
Your lender might even require pictures of the repairs and/or a copy of the repair bill as proof. And if the car is repossessed or returned to the lessor, you will likely be held financially responsible for any damage that was not fixed, anyway.
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