Is it dishonest to use insurance payout for something else?

[Anonymous]

Got into an accident, there is only body damage to my car and the other person's insurance determined that they were at fault. Insurance had me go to their approved body shop for an estimate and they are sending a check. They said I am not obligated to get it repaired there but their estimate is the highest they will pay out to me. (So, if I take it to another shop that charges 2x that, I am going to have to pay the remainder).

Pretty much, I think that is a crazy amount of money to pay just to fix a dent that doesn't change the safety or driving of the car. I would much rather put the money towards some of this month's bills and get the car fixed whenever. Is this wrong?

[Anonymous]

I think you can do whatever you want with the money.

[Anonymous]

If you own the car outright, you can. If you are still making payments (i.e. the bank owns it), you must repair.

[Anonymous]

This happened to us when we had a leak in our house and the insurance company just gave us a check. We used the extra money toward some other repairs in the house.

[Anonymous]

As long as you own the car outright.

[Anonymous]

Anonymous wrote:If you own the car outright, you can. If you are still making payments (i.e. the bank owns it), you must repair.

This is my understanding as well. The check is for the decrease in value to the car, to essentially make the owner whole. If you're the owner, you can choose to put that money towards something else. If you don't own the car outright but the car is worth more than the balance of the loan even after the damage is accounted for, you could technically probably still pocket the money. Brand new car that you're now upside down on? You're supposed to fix it.

[Anonymous]

I was rear ended in a Subaru Outback years ago. The bumper just looked scratched but the catalytic converter fell off so I had to take it in to be repaired. When they took the bumper off to paint it (I literally didn’t care about the scratch but they had to repair the converter anyway) they found the frame had been bent under the bumper near the wheel fender. If I had t taken it in we wouldn’t have known about the frame damage which may or may not have been a problem in the long term. It’s worth it to get it repaired to make sure it’s as safe as possible for driving around.

[Anonymous]

The car is a 1998, long paid off. Has over 200K miles on it. $1200 for repairs is not really worth it to me. I would prefer to use that to pay my credit card and other bills.

[Anonymous]

Anonymous wrote:The car is a 1998, long paid off. Has over 200K miles on it. $1200 for repairs is not really worth it to me. I would prefer to use that to pay my credit card and other bills.

Do it. It's fine.

[Anonymous]

Anonymous wrote:I was rear ended in a Subaru Outback years ago. The bumper just looked scratched but the catalytic converter fell off so I had to take it in to be repaired. When they took the bumper off to paint it (I literally didn’t care about the scratch but they had to repair the converter anyway) they found the frame had been bent under the bumper near the wheel fender. If I had t taken it in we wouldn’t have known about the frame damage which may or may not have been a problem in the long term. It’s worth it to get it repaired to make sure it’s as safe as possible for driving around.

If that's the case here, then fuel mileage will be reduced, and tire wear will be accelerated. And if that's the case, OP could decide at that point if she wants to spend $1200 at that point on the repair, or just sell the car for salvage.

[Anonymous]

Anonymous wrote:The car is a 1998, long paid off. Has over 200K miles on it. $1200 for repairs is not really worth it to me. I would prefer to use that to pay my credit card and other bills.

You’re in the clear. Use the money how you see fit.

[Anonymous]

Okay thanks. I told my mother about this and she thought it was totally dishonest. "If you don't want to fix the car, then what are they paying you for?". I kinda reasoned that the money was due me regardless because the person hit my car. My mother reasoned that because this isn't an emergency (as in, I need to pay $1200 in order to not be evicted), spending the money on anything else is fraud.

[Anonymous]

Anonymous wrote:Okay thanks. I told my mother about this and she thought it was totally dishonest. "If you don't want to fix the car, then what are they paying you for?". I kinda reasoned that the money was due me regardless because the person hit my car. My mother reasoned that because this isn't an emergency (as in, I need to pay $1200 in order to not be evicted), spending the money on anything else is fraud.

You pay your premiums for a reason. Not dishonest. We've spent money earmarked for one thing on other things often. We've gotten credits for real estate transactions on inspection items we didn't actually care about then never did the work. According to your mother that would be dishonest too.

[Anonymous]

No.

Our car was badly scratched but old and ugly, so we used the money for other bills. DH waterproofed the scratches so the wouldn't rust and that was it.

[Anonymous]

Anonymous wrote:I think you can do whatever you want with the money.

You can - but it’s fraud if you have another accident and try to get that same damage fixed with that claim.
So- you only get one payout if that makes sense.