Can I Keep the Insurance Money and Not Fix My Car?

Liability coverage, car ownership, and insurance claims checks are some factors that influence the answer to the question: Can I keep the insurance money and not fix my car? Let’s explore.
Can I keep the insurance money and not fix my car
Can I Keep the Insurance Money and Not Fix My Car?
Can I keep the insurance money and not fix my car? The short answer is yes, but this isn’t always advisable. Read on to learn why.
In this article

The money you receive from your insurance claim after a car accident may confuse you if you need help using it. You might wonder: Can I keep the insurance money and not fix my car? Do you have to pay the insurance on repairs, or can you pocket it? 

In short, yes, you can use the insurance money however you want. But firstly you need to consider whether or not this is the best decision. It might make sense to do this if you need more cash than you pay for repairs. 

The temptation to use the money for other purposes might be strong, but it’s only sometimes a good idea. In the long run, neglecting necessary repairs can cost you more money and decrease the resale value of your car. In this article, let us understand how to use your insurance money.

Can I keep the insurance money and not fix the car?

Yes, you can keep the money and not repair your car. If you own the vehicle outright, it is possible to keep the money. But if the insurance directly deals with an autoworks shop, keep the repair money.

Your insurer might send the check directly to a repair shop

Many insurance coverages directly deal with repair shops and encourage customers to send cars for repair. They pay the repair shop directly; you never receive an insurance claim check. In such situations, you cannot keep repair money with yourself. You have to inform your insurance provider of your preferred choice of repair shop. It also increases the speed and efficiency of repairs. The shop understands your car inside out.

You may need permission from your lienholder before cashing the check

The lease or loan company usually requires you to keep the car in good working order throughout the term of your agreement. You probably need specific insurance requirements if you lease or loan your car, and naming your company on your policy is a common requirement. Therefore, you may find that your insurance company issues your claim check with both your name and the name of your loan company.

The situation is different because of liability coverage. In this case, the settlement check is directed toward you, not the car’s owner. 

When you don’t have to use insurance claim check money to repair your car

If you own your car outright, you can use the insurance money however you like. You can buy a TV or use it to treat yourself to a spa day. You are not technically liable to use the money for repair, and the insurance is not concerned about it. 

But the insurance company will not be responsible if your car’s condition worsens. You will have to pay for repairs out of pocket if you don’t use car insurance money. You can also commit fraud if you apply for the same claims more than once and use the money for personal use rather than repairs. 

Can you keep any leftover auto insurance money?

You can keep the leftover money if you own a car outright. It is necessary to understand that you should be aware of your claims intentionally, as it can increase your premium overall. However, even if some of the money is left after necessary repairs, you can definitely keep it. 

How much should I spend to fix my car?

Car repair costs depend on the damages and your type of coverage. If your car has only minimal damage, it is better to cover it on your own. It ensures that your premiums are much lower as you have not applied for coverage. If the damage is extensive, the insurance company determines how much they will cover it. 

Read the fine print on your insurance contract

The contract of the insurance carrier will specify how damage claims will be paid out. It is possible to have a strategic partnership with an auto body repair shop and have them pay your insurance directly, removing the burden from you as the car owner.  

If you are looking for good car insurance, you can try Beem to find the best quotes to help you make the right choice. 

Should you spend the payout and not fix your vehicle?

If your car is not safe enough to drive, you must repair the vehicle first. It is wise to ensure your car is safe to drive. If you spend the insurance money, your car’s condition can worsen, and you might have to pay more for repair. Also, you cannot claim for the same thing twice as it will make you party to fraud. But if the car conditions are not dangerous, you can keep the insurance amount for spending it as you will. 

Do I have to fix my car with the insurance money?

The money you receive after depositing the settlement is yours to do as you please. It would be best if you settled any debts or other financial obligations this settlement intends to cover to avoid future problems. It’s okay to use the car repair money to cover these costs. Alternatively, you can save the money for a rainy day or pay off debts.


Can I keep the insurance money and not fix my car? Yes, but this isn’t always advisable. Firstly, remember that your insurance company isn’t necessarily on your side. Insurance companies are businesses for profit and aim to make money. As a result, the people working for the company will do what they can to minimize the money they have to pay out on any given claim. As a result, you should take steps to protect your interests.

The personal injury attorney you hire can help you through the claim process, fight for what you deserve, and explain the technical and legal aspects of the settlement you received, including whether or not some of the settlement or award is taxable.

It helps to note that auto insurance with Beem covers damage to your vehicle, other vehicles or property, and injuries to yourself or others. 

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Picture of Aniket Kulkarni

Aniket Kulkarni

A seasoned Product Manager specializing in car insurance content, Aniket has a passion for simplifying complex insurance concepts. His strategic approach to content development reflects years of experience in the product development industry, coupled with a commitment to providing accurate, reliable information.


This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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