Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

Full Bio →

Written by

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

Full Bio →

Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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 insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.

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

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.

The lowdown...

  • When you carry comprehensive or collision coverage on your own personal car insurance policy, your policy will pay for vehicle repairs when you have a covered loss that results in damage to your car
  • If you need to file a first-party claim, the damages must exceed your coverage deductible before the insurance company will investigate the claim and offer you a settlement
  • When you’re offered a settlement to repair your vehicle, you have the right to negotiate if you feel like you’re not being offered enough. Some adjusters will offer you more automatically and others will ask for you to provide third-party estimates
  • Most companies will cut you a check when they are settling the claim. If the company wants to pay the shop directly, simply ask to receive the direct payment instead
  • If the damage done to your car doesn’t affect it mechanically, you don’t have to use the money that you receive to fix the damage. If you don’t have the damage fixed, the insurer might not let you keep physical damage coverage

You never really know what to expect when you’re filing a claim until you have a loss.

While it can be helpful to watch a family member deal with an insurance claim, every company has a different way of handling things based on the type of claim and how the damage occurred. Knowing how to navigate through the steps of the claims process is a must.

The end goal when you’re filing a claim is to receive a fair settlement. For most policyholders, the settlement is used to pay for vehicle repairs, but not everyone cares how their car looks.

Enter your zip code above and find car insurance that fits your budget today!

If the damage is strictly cosmetic, you may be interested in taking the payout and using it on something other than vehicle repairs. Here’s what you should know before you use claim money:

Will your policy pay for vehicle repairs in the first place?


Auto insurance policies don’t automatically pay for your vehicle repairs after you’re in an accident.

It’s possible that you have a plan that will pay for first-party body shop bills, but you need to pay premiums for full coverage to file a repair claim with your own insurance company.

Full coverage is a package that includes comprehensive and collision coverage. If you have an accident or some type of unavoidable incident, your policy will pay up to your car’s Actual Cash Value (ACV) to get the car back to its pre-loss condition.

If the damages exceed the ACV limit, your car will be totaled and you’ll have to decide if you want to keep it or replace it.

Compare Insurance Providers Rates to Save Up to 75%

 Secured with SHA-256 Encryption

Understanding How Your Deductible Works

If you get into an at-fault accident or you have a non-fault comprehensive loss, you aren’t completely off of the hook just because you have full coverage. When you have physical damage coverage, you have to select deductibles for both comprehensive and collision.

A deductible is the portion of the loss that you’re responsible for paying before the company will agree to issue a claims payment. If the deductible that you select is high and you have minor damage, there’s no point in filing a claim since the damages must exceed your deductible before your benefits kick in.

Will the insurance company require you to get repairs done through a specific carrier?

When you file a first-party claim, One of the first questions the company will ask you is where your vehicle is located.

The company will then send an adjuster to the vehicle to inspect the damage and estimate how much it will cost to repair. In some cases, the vehicle might be towed to a shop the carrier partners with to do the estimates.

You should have an idea of what you plan on doing with your car before you start to make arrangements with your adjuster. If you’re worried that you might have to take your car to a certain shop, don’t fret. Under state law, consumers aren’t required to get repairs done at a shop recommended by the insurer.

Do insurance companies pay the shop or the policyholder?


If you’re not going to use the shop that the insurer recommends, it’s your duty to pay the difference between what your shop charges and what the insurer will pay for labor. If you’d prefer not to move forward with the repairs through your shop of choice, you can contact your agent and let them know to issue the check to you.

Insurance companies won’t issue checks to just any person who has a loss in the covered accident. The check will only be issued the named insureds and also the loss payee if the car is financed. If you have a loss payee, the policyholder will have to get the check signed off before they can cash it.

Compare Insurance Providers Rates to Save Up to 75%

 Secured with SHA-256 Encryption

Can an insurance company say how you can use your claim money?

When a claim check is issued to you, it is your money and you can use it how you see fit. If the car is still operable and the damage is only affecting its appearance, taking the money might sound appealing.

Keeping the money for a rainy day or using it for a trip are both options. While the check was cut to cover repair costs, you get to decide what you want to do with the settlement. If you use the money for any other reason, it’s called cashing out the insurance claim.

What should you know before you consider cashing out your insurance claim?

Cashing out a claim for damage to your car isn’t always a realistic option. If you are leasing or financing the vehicle, you’ll have to fix it. All leasing and financing contracts say that you must keep the car in good repair at all times. The company also must be notified when you have a claim so they can control how the check is used.

Another drawback involves your company. If you don’t get the car repaired, the carrier could remove full coverage from the car.

Some companies must inspect the vehicle after the claim to see if the damage was repaired so that they don’t pay for the same damage twice.

It’s tempting to hold onto a check when you get a large sum of money, but the consequences associated with not using a pay-out for its intended purpose usually far outweigh the benefits.

Enter your zip code on our site today to receive free quotes from multiple local companies!