Expert: Anne - 2/27/2010

Question
i have a 02 ford explorer and i recently wrecked the vehicle in he snow. the adjustor came out a few days ago, and estimated the total damage to be around $2500 minus my $500 deductible.i currently have a loan on the vehicle with state farm bank and my insurance is with them also. today i recieved a check for the amount to fix it, but i have one question. is it considered insurance fraud if i dont fix the vehicle right away and spend some of the money on other bills? can they MAKE me have it fixed since i am still paying on the loan? i recently lost my job, and this would help pay my mortage, but i dont want to get in any kind of trouble, ya know! so is it fraud, i do plan on having it fixed when i get my taxes this year, but that could be weeks from now! please help if you can, i dont know if it matters but i live in the state of south carolina, i know diff. states have diff. rules! thnks for your time and advice!

Answer
Hello Jessica,

Well, it's not fraud unless you lie or misrepresent the facts. If you tell them or say something that it's not true to gain coverage.

However, the insurance company (in this case the bank)can request that you make the repairs. Usually, you get a check and you can do whatever you want (you don't have to get the car fixed). However, if there is a lien holder, the insurance company will (or should) give you a check with your name AND the bank's name on it. If you try to cash the check, the bank will have to sign for it.

They will not sign, but take the funds and apply them towards your loan amount. If you do want to fix the car, then the insurance company will make a payment to you AND the bodyshop, that way they know that the bank's interest is protected. See:

http://www.auto-insurance-claim-advice.com/Financial-Responsibility.html

I hope this helps
Good Luck
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