There are so many questions involved in choosing an insurance policy for your automobile. It is essential to properly understand the terms, conditions, and policies of your automobile insurance. To help you understand what car insurance checks are all about, the following are the answers to some of the most common questions asked car insurance checks.
The Ideal Time to Use a Car Insurance Check
If you are involved in an accident and your car has insurance coverage, you will get an insurance check from your insurance company. Your insurance check covers the damages to your vehicle as a result of the accident. You can choose to use your insurance check to repair the damages to your car if you desire.
You are only obligated to use an insurance check for car repairs if the car is not entirely yours. For instance, if you haven’t completely paid off your car loan, you will have to use the insurance check to repair the car. In most cases, the insurance company may require you to go to the repair shop directly.
If your car is completely totaled or damaged beyond repair, the insurance company will compensate you by paying the actual worth of your vehicle before the accident.
Can I Choose Not to Repair My Car?
After getting the check for your damaged car, you may want to keep the check to meet a more pressing financial issue. You can certainly choose to keep the check and not fix your car.
If your car suffered minor damages, you might choose to pocket the money. However, if your vehicle has suffered significant damages, it is better to repair it as soon as you can. Not only is it risky to drive a damaged car, but the damages to your car may get worse with time.
Should I Notify My Insurance Company If the Insurance Check Is More Than the Repairs?
If the insurance check is written for more than the cost of repairs, you should notify your insurance company about the error. If the insurance company finds out that they have overpaid you without you telling them, they could sue you for insurance fraud. It is better to notify them once you find out that you have been overpaid. In some cases, the insurance company may let you keep the excess money for future damages.
To ensure that the check is not more than the repair, consult with your automobile mechanic to confirm that all damage to your vehicle has been fixed. If you have confirmed the repairs and are left with the excess insurance money, make sure to inform your insurance company.
Will I Receive a Check If I Still Owe Money on My Totaled Car?
Different automobile insurance companies have their own yardsticks for determining if a car is a total loss. If the cost of repairs exceeds the set benchmark, your insurer will rule out the vehicle as a total loss. The standard is usually about 80% of the total worth of the car before the damage.
If you still owe money on the totaled car, you will receive a check that has your name on it as a beneficiary as well as the name of the bank that loaned you the money to purchase the car. This means that the bank that gave you the car loan has to be paid off first. In essence, you will have to settle your car loan first. If the check is more than enough to pay off your car loan, then you can keep the money left.