When you’re involved in a car accident or damage to your vehicle, it’s natural to wonder if you can fix it yourself with the money your insurance company will pay.
The short answer is, in most cases, yes, you can. However, there are a few things you need to understand before you make this decision.
I’ve researched this topic myself, and I’ll walk you through what you need to know, what your options are, and the potential benefits and risks of using insurance money to fix your own car.
Understanding Insurance Payouts
When your insurance company agrees to cover the cost of repairs after an accident, they typically calculate the amount based on the damage assessed by an adjuster.
This payout is intended to cover the cost of returning your vehicle to its pre-accident condition.
Once the payout is issued, you usually have control over how the money is spent.
This means you can decide to fix the car yourself, hire a professional, or even leave the car as is. However, it’s essential to know the terms of your policy to avoid any surprises.
Is it legal to use insurance money to fix your own car?
Yes, in most cases it is legal to use insurance payouts to repair your own car.
Insurance companies do not require you to go to a specific repair shop unless your policy explicitly states otherwise.
This gives you the flexibility to handle repairs in a way that works best for you.
However, you need to make sure that your repairs meet certain standards.
If the car is financed or leased, the lender or leasing company may require proof of professional repairs, as they have a vested interest in maintaining the value of the car.
Benefits of fixing your own car with insurance money
Fixing your own car can save you money if you have the tools or experience repairing vehicles.
You can shop around for parts, use pre-owned components, or even make minor repairs that don’t require expensive equipment.
Another benefit is that you can decide which repairs to prioritize.
If some of the damage doesn’t affect the vehicle’s performance, you can focus on fixing the important parts first and save the rest for later.
This approach can extend your insurance coverage even further.
The Risks of Fixing Your Car Yourself
While there are benefits to fixing your car yourself, there are also risks. If the repair isn’t done properly, it could lead to further damage or safety concerns.
Additionally, if you decide to sell the car later, improper or incomplete repairs can lower its resale value.
If you don’t have experience repairing vehicles, you may end up spending more money and time trying to fix the mistake.
In some cases, insurance companies may deny future claims if they find that improper repairs contributed to new damage.
Situations Where DIY Repairs May Not Be Allowed
You generally have control over how your insurance money is spent, but there are exceptions.
For example, if your car is financed or leased, your lender may require professional repairs.
They may even request an inspection or proof of repairs to ensure that the value of the car is preserved.
Some insurance policies also have clauses that require you to use approved repair shops or meet certain standards when repairing your car.
Always check your policy or talk to your insurer before starting a DIY repair.
How to Fix Your Car with Insurance Money
If you decide to fix your car yourself, start by thoroughly assessing the damage.
Make a list of all the parts and tools you need. You can buy parts from auto supply stores, online retailers, or even salvage yards to save money.
Next, plan your repairs carefully. If you are not confident in your abilities to perform a specific repair, consider hiring a mechanic to do the job while handling the simpler tasks yourself. This way, you still save money without compromising on safety.
Finally, keep all receipts and documentation of the repairs. This is important if you ever want to prove that the car was properly fixed, especially if you plan to sell or refinance it in the future.
What happens if you don’t fix your car?
You don’t have to fix your car after receiving an insurance payout, as long as it’s still safe to drive.
However, leaving your car unrepaired can have consequences. Unrepaired damage can worsen over time, leading to more expensive repairs later.
If the car is financed or leased, the lender may demand proof of repairs.
Avoiding repairs can also lower the car’s resale value or make it difficult to trade in at a dealership.
Can I keep my insurance money instead of fixing my car?
Yes, you can usually keep the money as long as you own the car. However, it is important to make sure that the car is safe to drive.
Do I have to use a specific repair shop?
Not always. Most policies allow you to choose where and how to have your car repaired, but some may require you to use an approved repair shop.
What if the insurance payment is not enough to cover all the repairs?
If the payment is insufficient, you can either negotiate with the insurer for a higher amount or cover the remaining costs out of pocket.
Can I repair my leased car with insurance money?
Leased vehicles usually need to be professionally repaired to maintain their value. Always check with the leasing company before making DIY repairs.
Will fixing my car affect future insurance claims?
Improper repairs may result in future claims being denied. Make sure that any DIY work meets safety standards to avoid this problem.
Final Thoughts
Fixing your car with insurance money can be a practical option, but it’s important to carefully weigh the pros and cons.
Make sure you understand your insurance policy and any legal or financial obligations associated with your vehicle.
With a little planning, you can make the most of your insurance coverage and get back on the road safely.