Can I cash an auto insurance settlement check?

Question

My Fiancée was in an accident where the other driver was 100% at fault, and we had a witness come forward to support our claim.

We filed a claim with our insurance, paid our deductible and had the car fixed; our insurance told us they would be pursuing payment from the other driver's insurance, and if they were successful we would be refunded our deductible.

A few weeks later, I received a sizeable check in the mail from the other driver's insurance, listing me as the claimant.

• Is this a settlement check?
• Is this owed to our insurance company, who paid the damages up front, or is this a check owed to us?
• Basically, I'm wondering if this is our money to use, or if this is a check that should have gone to our insurance company; it seemed odd that the check would be issued to me when my insurance company is who was dealing with the other driver's insurance.
• I'm worried we'll cash the check, and our insurance will come looking for it.

Thank you for your help!

Answer 1

When I have been struck, and the other person has been at fault, I have not gotten my insurance company involved. The main reason is that if I go through my insurance company I will get paid for the damages minus my deductible, and my rates may go up because I made a claim.

Instead I have filed a claim through the other drivers policy. The other driver pays the deductible.

Over the years I have seen different ways of paying the claim. It depends on the company involved and how the repair was done.

• Sometimes the repair shop dealt directly with the insurance company. No money or checks were handled by me. Even the rental car company dealt directly with the insurance company.

• In other cases I was asked to pay for the repair and then send the bill to the insurance company.

• In other cases the check was sent to me based on the estimate, and then I gave the check to the repair shop. This was the worst because the timing of getting the check was always problematic. One time the repair shop found additional damage so a second check was needed, and that delayed the amount of time the car was in the shop because of the slowness of the mail.

There can also be adjustments to the procedure if the item has a loan. We had to file a claim with the homeowners insurance once, they made the check out to us and the lender. That way the lender knew about the damage, and the lender would only release the funds if the repair was made. It could be possible that some auto loans could work this way.

In any case you should ask your insurance company. They will want to get their money back. If the check was made out to you they will tell you how they want to proceed. If the check is to cover other items that your company didn't pay for: rental car, towing, deductible... they may only need part of it back.