You were involved in a car accident and either your insurance or the other drivers insurance is going to send a check for repairs. But the damages are not that bad and you car is still drivable. So can you take the check and cash it in and not repair your car?

Do you own the car?

If your car is a lease or a loan, you will not be able to cash your insurance payout. Your lease and loan agreement probably has a clause that makes you keep the car in good condition. Especially with a lease, as you are to return the vehicle once your lease is up in good or new condition.

Owning your car provides you with more flexibility when it comes to repairing you car. Your insurance company will normally give you the option to repair your car or to not. If you decide to not repair your car, your insurance provider might want you to drop physical damage coverage. The insurance company will not want to continue insuring a car that is already damaged. In a situation where you are in a second accident it will be difficult to analyze the damages and pay out once more.

Who is the check made out to?

Some insurance companies will have a set of shops they work with directly. Because of that they will make all payments out to them directly. Or your leasing company, if your car is leased, might require that they are on the payment as well. Both scenarios will not allow you to cash out the payment.

What does your state say?

Car insurance policies are regulated differently by each state. Certain policies might be different based on where you live.

For example, Massachusetts law requires the insurance companies to make checks out to the client.