Can I Keep Insurance Money From a Car Accident?

You can situationally keep insurance money from a car accident. Your answer depends on a few factors. For example:

• If you have a loan on your car, you will probably have to use the insurance money for repairing it.
• If you own the car yourself, you may be able to keep the insurance money or spend it on something else.
• Other types of insurance money, such as “pain and suffering” damages, may be yours to keep and use as you see fit.

Our Atlanta car accident lawyers can break down each of these scenarios, but we can also offer you individualized guidance during a free case consultation with our staff. If you have questions about your right to keep insurance money after a car accident, consider reaching out and scheduling your no-obligation appointment today.

Do I need to use the car insurance money to repair my car, or can I keep it?

Almost all car accident insurance payments will include money for “collision,” or paying for repairs to your car. In theory, it’s your car, so why can’t you just drive it dented and keep the cash? In practice, however, many drivers don’t actually own their cars outright. Instead, they have a loan from the dealership or a bank. That means the creditor partly co-owns the car.

Thus, in general:

• If you have a car loan, you are probably contractually bound to use the car insurance money to pay for the repairs. In fact, the insurance company may make the check out directly to their preferred mechanic shop, so that it cannot be used any other way. Alternately, they may require proof it was repaired (such as photos and bills).
• If you own the car outright, you may have a choice about how to use the money. However:

• Check your insurance policy. Some still require that you repair the car. Others won’t continue providing collision coverage if you don’t repair it.
• Consider the resale value. If your car is older and has little trade-in/market value, this may not be a factor. But the “free” money you get today may be swallowed by the loss of resale value later.
• Think about future accidents. If you have another collision in the future, your already-damaged car is likely to suffer dramatically more damage than it would if it was repaired. The insurer may not pay out the full amount you need if some of the damage was from the previous accident.

• When a car is totaled—and you own it outright—this becomes a non-issue. You will be required to turn over the car to the insurer (permanently), and you’ll be paid an amount of money equal to its fair market value. This money is yours to do with as you like. You can replace the car or use the money for something else.

What about other kinds of money awarded in a car accident settlement?

Many car accident claims will pay out additional money, especially if you have a good Atlanta personal injury lawyer. This money usually falls into two big groups:

• Medical costs for your injuries
• General damages like pain and suffering meant to compensate you for your loss

Insurance money for medical costs will generally be consumed by medical treatment. In many cases, insurers actually try to give you less than you’ll need for medical bills, and your lawyer has to fight just to get the fair amount. That means it’s rare that there’s extra money left over.

Insurance money for pain and suffering is, generally, yours to keep. If all other costs related to the accident are covered, and some of this money is still left over, you can invest or spend it as you see fit. In fact, this is the whole point of pain and suffering (and similar types of damages): it gives you a safety net and softens the blow of the injury on your life. You may never be able to get your original health back, but the money allows you to rebuild and improve your life in other ways.

This is why it’s so important to have a lawyer who will fight for you and get you the most you deserve. Many insurance adjusters don’t offer pain and suffering at all if they can help it, but when you apply legal pressure, pain and suffering can become the largest part of your settlement.

Maximize the Insurance Money You Take Home

Insurance money can truly help make a difference in your life after a car accident. However, many accident victims get put in the uncomfortable situation of barely having enough insurance money to pay for their accident costs—or not having enough at all. This can make it difficult to keep any of the money damages you are paid, or to truly feel “compensated” for the gigantic impact an accident can have on your life.

You don’t have to find yourself in that situation. When accident victims are underpaid, it often means they didn’t have a lawyer representing them, or didn’t take the time to find someone who focuses on car accident cases and fights for the client. There are better options out there. And our legal team can help.

For over twenty years, we have devoted ourselves exclusively to defending victims and helping them get the money they deserve. We believe your accident money is your right and we will fight to maximize the amount you get—and we charge nothing if you don’t recover money. Let us give you a free consultation.