You’ve been in a car accident and your insurance company did its job: examined the damage, appraised the cost of repairs, and now you’re just waiting for the check they’ll release to pay for repairing your car. However, you may be surprised to notice that the claim settlement check is made out to you and the body shop that will repair your car. What gives? This can cause some consternation, but there are several issues to consider when determining who gets the claim-payment check.
If you’re in an accident and have collision coverage, your insurance company will collect your deductible (the amount of money you need to pay before your insurance takes effect) and issue a check for the repairs either to you alone or to you and your body repair shop. In this type of scenario – also known as a first-party claim situation – the reason why the check is made out to two parties is to avoid insurance fraud and to make sure that the money will be used for repairing your vehicle. But if you choose a repair shop that has been recommended by your insurer, chances are you won’t even get to see the check because it’ll go directly to the that body shop.
One more complication associated with settling first-party claim situations is when your car is leased or is still under financing. In this case, the insurance company will issue a check made out to both you and your leaseholder or lien holder. These entities in turn will make their own examinations of the vehicle and conduct their own relevant processing methods, which could take weeks. So even if your car is already fixed, you still won’t be able to retrieve it because your leaseholder or lien holder has not released their part of the funds from the insurer’s check.
Third-party claim situations, where another car hits your vehicle and the at-fault driver’s insurance company is footing the bill for your car’s repair, is generally less of a hassle than first-party claim situations. In most cases, the at-fault party’s insurer will make out the check solely to you for you to spend on the repair of your car at the body shop of your choice. But if your vehicle is on a leas or loan, you should fulfill your financial obligations to them.
Getting your accident-damaged car repaired is one of the last steps in the claim settlement process. Knowing who gets the claim-payment check can facilitate the preparations needed to fix your automobile, give the body shop the payment due them, and get you back on the road in your own car.