Auto insurance companies can compensate you in the event of a car accident or damage. Once you get the compensation amount, you may wonder what happens if you don’t use the insurance money for repairs and keep some cash for yourself. Well, if that’s what you have in mind, certainly you are at the right place. I will help you understand what will happen if you don’t use this money for repair or instead use it for yourself. Is it a legitimate way of spending money or not? Let’s find out.

What Happens if you don’t use insurance money for repairs?

I am going to give its answer based on your car ownership scenario.

What happens when you own a car?

You file a claim, get the compensation, and now plan to spend it based on your preference and not on the repair. Well, it’s a bad move. If you don’t spend money on car repair and maintenance then your car then basically you ignore an issue, which could lead to a fatal accident or car breakdown later.

Are you ready to take this much risk?

Even if you go with a cheap repair option, the problem of the car won’t resolve and soon you will face the same issue again.

Not addressing the main cause or simply ignoring it won’t benefit you in the long run. Let’s say you again face the same issue and file another claim. In that scenario, you can’t expect an insurance company to pay you again.

It’s because insurance companies are vigilant and not spending money on repairs means committing fraud. If they suspect intentional misrepresentation of a claim and simply probe into the matter, they will find out the reality. As a result, they will reject your claim and you will be held financially responsible for repairing your own car.

In simple words, you may ignore this issue by not using insurance money for repairs at this moment. But, later you may face a bigger issue or malfunction again and that time the insurance company will find out eventually, and you will have to pay a huge cost of repair all by yourself. Now, it’s up to you whether you want to face the consequences later or not.

Normally, you need to provide some estimate of the cost by taking your car to a mechanic. Some car owners deliberately send an overestimate, just to get some extra insurance money. It’s another bad move because insurance companies can spot such discrepancies easily. Some insurance companies may ask you to use their suggested mechanic. So, whether you use your mechanic and one referred by a company, don’t overestimate the cost. And try to spend money only on repairs.

What Happens When You car is leased

If you get insurance money for the repair of a leased car, and you plan not to spend money on repair, then it’s a wrong move.

First of all, it’s a leased car and it’s written in your lease agreement that you need to maintain the good condition of your car and spend insurance money readily on the repair. If there is some damage, and you don’t address this issue, you will be held responsible by the lender.

When you get a check for addressing a repair issue from an insurance company, generally this check includes your and lease company’s name. In that case, your lease company will also oversee car repair and you won’t be able to bypass them.

When an accident happens due to another driver’s fault, in that case, a check is in your name and it’s easy to bypass the lease company. But again, if you don’t address this repair issue on time, then you will be held responsible by both lease and insurance companies. Not spending insurance money on repair means will affect your lease terms and agreements; as a result, you will encounter consequences.

Final thoughts

It is advisable to use your insurance money on car repairs. Now if you are wondering

What happens if you don’t use insurance money for repairs then the simple answer is you will face financial responsibility later on at some point. Whether you own a car or it’s on lease, try to maintain its good condition by addressing its issues on time. When you don’t address them on time, they will lead to bigger issues later. Once you repair the car and there is some leftover. You don’t need to return this amount but it could be a buffer for future accidents. For expert advice, contact Matrix-Insurance at (706) 310-0000.