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What Is Deposit Insurance?

Our car was declared a total loss, so can we deposit the check the insurance company sends to get it fixed?

  • Repost since the answers I got pertained to us taking a settlement on the car and it now being the insurance company. We are NOT doing that. We are going to repair the car so the insurance company will send us a check for the market value, and we will have to pay the rest for the car repair, but we want to know: If our car was declared a total loss because the cost to repair the car damage from a hit and run was more than the value of the car, and we wanted to repair the car but did not have the money at this time, could we just deposit the check the insurance company sends to us with our name on it and the repair shop until we are ready to pay the difference to get the car fixed? We do have a lien holder on our car. The car is worth somewhere between $3,000 and $5,000 and the damage will cost about $5,300 to fix. We currently owe about $9,800 on our car, and can not afford not to have a car. In our minds we would want to request the insurance company to send us the check and us deposit it to use in the near future to ge the car fixed, and we wanted to know if we would even be able to deposit the check since it has our name on it, but apparently would also have the repair shop of our choice on it as well. . Additional Details Just to clarify we are not going to do a settlement where the insurance company buys our car, we are going to repair it where the insurance company pays the value of the car and no more and we would have to add to the cost of repairs from that part. They said that they would send us a check with our name on it and the repair shop of our choice on it. What we are trying to figure out is if once we receive that check, can we deposit it into our bank account until we are able to pay the difference to get the car repaired?

  • Answer:

    You can't deposit or cash the check without the signatures of all persons listed on the check. Ask your insurance company why it is necessary to have the name of the repair shop on the check. They are indemnifying you by paying you the market value of the car - why should they have any say in whether you fix the car at the shop you're looking at now, change your mind and go to another shop, or totally change your mind and decide not to have it fixed (and sell it to a scrapyard and buy a different car)? But I'm surprised that the lienholder's name isn't on the check since they still have a financial interest in the car.

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If the check has both your name and the repair shop on it, there will be a problem depositing it without the repair shop signing off. Since it has a finance lien on it, you will still be required to keep making payments and carry full coverage insurance on it. Not likely any insurance company will do this. The check actually should go to the finance company.

sensible_man

aaaahhhhhhhh i think the lienholder will be in the mix/actually well into the mix and they will get the check/if you just take the money thats fraud

ken k

You cannot deposit a check made payable to you and someone else (the lender, or the body shop) without them signing off on it, too - and they're NOT going to sing off on it. You'll have to ask the adjuster to reissue the check, without the body shop named on it. If there's a lender, then you'll have to sign it, and give it to the lender to pay off the loan. If you're keeping the car, then the insurance company will ALSO subtract salvage value from the check - maybe another $1,000. HOWEVER, if it's a total loss, they should NOT be listing the body shop.

mbrcatz

when a car is a total loss, the insurance company pays you for it. Then you can buy the car back from them if they let you, and you can fix it if you choose

Dave87gn

If the car is declared a total loss, the insurance sends you fair market value and then owns and takes the car. If you have arranged with them to buy the car back from them at salvage value and keep it, the check and the car are both yours to do as you please. So yes, you can park the car and deposit the check in your account if you like. However, you are aware that if you take that route, you will be given a salvage title on the car aren't you? That will make it difficult to insure the car once you get it fixed, and impossible to get any extended coverage like collision on it. Also the value of the car just dropped by about 50% because of the branded title. And if they send you a two party check with both you and the repair shop as payees, you would both have to sign off to do anything, so check on that with the insurance. They should be able to make the check only to you.

oklatom

The check will likely come with your name and the lien holders name on it. If this happens you will have to endorse it and hand it over to the lien holder. If the check comes with you name on it only you will need to notify the lien holder as it is illegal to sell mortgaged property with out the lien holder's permission. Talk to your lien holder about this. Merry Christmas Bob

Yes you can deposit it, no need to get repaired its total loss. Just go out and get another used car with that cash.

First of all if a car is totaled by the insurance company, that car now belongs to the insurance company and they will sell it to a salvage yard as junk. So unless they give you the option to buy it back from them, the car will no longer belong to you. When it is totaled, the check will go to the lien holder (not to you). If the check is less than what you still owe on it, you must keep making payments on the car until the loan has been satisfied. For the future, if you insist on being "upside down" on a car, you need to look into GAP insurance. GAP insurance will pay the difference between what you owe and what you get for the car if it is totaled.

Entidtil

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