Expert: Charlie Barone - 8/11/2009

Question
My car was damaged when I side swiped a concrete guard at a gas station. Myinsurance company suggested 3 repair shops that they work with and I advised was probably going to use a shop I had used before.  I did get an estimate at the shop and advised my insurance company of their estimate.  They sent a check immediately with a letter stating that they had spoke to the repair shop I had the estimate at and they had made an agreement with them for a lower estimate.  They also sent a check with my name and the repair shops name on it. When I called them to ask why they put the repair shops name on the check as well as mine, they stated they had to since I still was paying on the car.  Why can't they just put my name on the check so I can decide for sure where I want it repaired?

Answer
You can have your car repaired at any shop you choose. However, the lien holder's name will be on the check as long as they need your insurance company to protect their collateral interest (your car). This is to prevent people from cashing insurance checks, defaulting on their car loans and leaving the bank to repossess a wreck that is not worth what is owed to them. Your bank is a co-insured party at this point. When the car is paid off in full, then your insurance company can write checks directly to you.