Using a Car Insurance Reimbursement Check for Damages

You aren't required to use your car insurance reimbursement check for damages unless you are at-fault for the accident. But using your car insurance reimbursement check for anything else besides repairs could affect your car insurance rates. Insurance companies keep track of every claim you make, so it's in your best interest to compare car insurance quotes online if your switching providers after an insurance claim.

Free Car Insurance Comparison

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Free Car Insurance Comparison

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

UPDATED: Jun 2, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 2, 2022Fact Checked

Here's what you need to know...

  • You do not have to spend your reimbursement check on fixing your vehicle
  • After an accident, file a police report right away
  • Contact your insurance company after an accident, even when you are not at fault. They will advocate for you

If your car is damaged in a way that is covered by insurance, such as through liability or collision coverage from an accident or comprehensive coverage following a hail storm, you will be reimbursed by the insurance company for loss within the limits set by the policy.

Once your deductible is paid out, the insurance company will cover the difference either by paying the auto repair center directly or by issuing you a check.

If you get a check from the car insurance company, you do not necessarily have to get your car fixed with those funds.

There are several reasons why you may want to consider cashing the check and not repairing your car, although there are also good reasons for fixing your car.

Provided the car insurance company does not set forth any conditions, the decision to repair your vehicle is ultimately yours.

If you want to compare quotes on coverage from many different companies, use our FREE tool above!

To Fix or Not to Fix your Car

The first decision you always need to make when your vehicle is damaged is whether or not you want to make a claim with your insurance company.

If you are in an accident that involves another party, you should file a police report and notify your insurance company immediately.

Also, if your car is owned by a bank or leasing company then you must report the damages right away. However, there may be times when you first want to consider the out-of-pocket cost of your deductible versus how much cost the total repairs will be.

If your car is damaged by hail and you have a $500 deductible and the cost of the repairs will be a total of $600, it may not be worth the $100 for you to file a claim with your insurance company, especially if there is a risk of your premiums going up as a result of the claim.

Premiums do not usually increase as a result of a single claim, but you may want to consider the long-term effects of cumulative claims over the savings of minor expenses.

Another reason you may decide not to fix your car is the age and condition of the car at the time the damage took place. If the car is already rusting you may not mind a few cosmetic flaws such as dents from hail.

If you are getting ready to sell your car, you may decide not to fix your car because you may not see a return on the investment.

For example, if your car is going to cost $2,000 to fix but will only increase your sale by $1,500 there is no cost benefit to fixing the car.

If you are uncertain, you should get an estimate for the repair and find out how much you will get for your car both before and after the damages are fixed. This will help you determine the value of fixing your car.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

secured lock Secured with SHA-256 Encryption

The Cost of the Car Insurance Deductible

Regardless of whether or not you fix your car, remember that when your car insurance company issues you a check it will be for the difference between your deductible and the estimated amount of the repairs.

If your car is estimated to cost $750 to restore it to its previous condition and you have a $500 deductible, then you will only receive a check for $250.

The deductible does not apply if the damages to your car are covered by someone else’s insurance. In that case, you should receive the full amount that is estimated for the repairs.

Submitting an Car Insurance Claim

If your car is damaged, you need to quickly determine whether or not you are going to file a claim with your insurance company.

Time is always of the essence when dealing with matters of insurance and if you wait to file a claim beyond the time stated in your policy you risk losing rights to your coverage for that particular incident.

Filing a claim is quite simple, although it may require a police report as well. Call your agent for claim instructions if you do not know the procedure.

Some insurance companies allow you to file a claim by the internet or the phone as well as in person at your agent’s office. It is a good idea to keep your insurance information and claim instructions in your car at all times.

Always go through your own insurance company, even if your car was damaged by someone else.

Most car insurance companies will initiate the claim process with the other insurance company for you, mitigating your stress for no charge.

They will be sure that you receive fair compensation for the damages incurred and also, they will follow up to be sure you received payment or that your car was fixed accordingly.

Filing a Claim With Another Driver’s Insurance Company

According to New Jersey state regulations, drivers in that state have a choice of filing first-party or third-party claims to cover vehicle damage.

The first-party claim is one that requires your car insurance company to make payments up to the value stated in your policy.

A third-party claim requires the insurance company of another driver to cover your vehicle in proportion to the amount of fault assigned to their driver. More often than not third-party claims will not be sufficient to completely replace your vehicle.

Most other states have similar systems in place to collect payment from another driver’s insurance company.

The thing to note is that in states with no-fault insurance laws, it is not possible to go after another driver’s insurance company to pay for:

No-fault states require each insurance company to cover their own drivers for these types of things. If you are concerned about the potential of personal injury, you may want to purchase extra insurance coverage.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

secured lock Secured with SHA-256 Encryption

Comparing Car Insurance Companies

Whether you ever need to file a claim or not, you always need to have car insurance in the event you are in an accident or possibly some other damage occurs to your vehicle.

You can get FREE quotes now from top agents just by entering your ZIP code below to start the process. Get started finding the best car insurance today!

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

Full Bio →

Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

Full Bio →

Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

secured lock Secured with SHA-256 Encryption