Can you keep the insurance money after someone hits your car?

Asked by: Augustus Hahn  |  Last update: October 2, 2025
Score: 4.5/5 (18 votes)

The auto insurer has fulfilled their obligation by making payment on a valid claim, so as long as your policy and state allow it, you can keep the money to use as you choose.

Is it illegal to keep car insurance money?

Yes. The purpose of insurance is to make you whole. You are free to do whatever you want to do with the money.

Can I just keep the money from an insurance claim?

You definitely can keep the money and not repair it, but you may have received less than you entitled to. The adjuster only pays the visible damage he sees on the outside, and any internal damage will need to be filed a secondary to get reimbursed.

Should I file an insurance claim if I am not at fault?

Always File a Claim, Regardless of Who Was At-Fault

One of the primary questions we receive from clients who have been in an accident is whether they should report the accident to their own auto insurance carrier, particularly when the accident was not their fault. And the answer to that question is: always.

How does insurance work when someone hits your car?

Collision coverage typically helps pay to repair or replace your vehicle if it's hit by another vehicle (or if you hit another vehicle or object), regardless of who is at fault. Even if you cannot find the other driver, you may be able to file a claim under your own auto insurance policy's collision coverage.

Lawyer Reveals Easy Car Accident Claim Process

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When someone hits my parked car and I have liability insurance?

If someone on the street hits or sideswipes your parked car and you can prove who caused the damage, their insurance should cover you. If you don't know or can't prove who hit your car but have collision or UMPD coverage, your insurance should cover the damages.

Is it better to file a claim with your insurance or theirs?

After a car accident, you should notify your insurance company and file a claim, and not deal with the other driver's insurer. Except in rare circumstances, it is not wise to contact them.

When someone hits you, do you call your insurance or theirs?

For example, if your car repair damage is $19,000 and the other driver's insurance covers up to $15,000, you still have to pay $4,000 in repair bills. In this case, your car insurance company may cover the costs resulting from this underinsured driver. This is why you should call your insurance if someone hits you.

Will my insurance go up if I don't make a claim?

Will my car insurance go up after an accident? Unfortunately, the simple answer to this is yes. Whether the accident was your fault or not, making a claim will usually lead to an increase in your car insurance premium the next year and you could see an increase even if you don't make a claim.

How does insurance work if it's not your fault?

Who pays in a no-fault accident? If there's an accident between two drivers, each party's PIP coverage typically pays for their respective medical bills and/or wage loss up to their policies' limits, no matter who caused the accident.

Can you keep money from a car accident claim?

The auto insurer has fulfilled their obligation by making payment on a valid claim, so as long as your policy and state allow it, you can keep the money to use as you choose.

Can you keep unused insurance money?

The short answer is that yes, you can choose to do whatever you want with the insurance money, but you need to ask yourself whether or not this is the best decision. If you need the cash more than you need to pay for the repairs, then this might seem like the correct decision.

Who gets the insurance check when a car is totaled?

If you own the car without any loans or liens, you will receive a check for the value assessed by the insurance company. If there is a loan, the check usually goes first to the leasing company or the lender. If you owe money on the vehicle, you should notify the lending company that your car has been totaled.

What happens if you don't use insurance money to fix your car?

The primary concern of not using insurance money for car repairs is the potential for worsening the vehicle's condition. Whether you ignore the issue or opt for cheaper repair options, your insurance provider may not cover any subsequent damage or malfunction.

Can I keep extra money from an insurance claim?

You may be able to keep excess money as long as you're not violating your provider's rules or committing insurance fraud.

Can you pocket money from an insurance claim?

In some cases, your insurance provider could overpay for a claim, leaving you with some extra cash. You may be able to keep extra money from an insurance claim, but you'll need to carefully read your policy first to make sure.

What happens if someone files a claim against your car insurance?

Unfortunately, your insurance premiums will almost certainly increase when a claim is made against you. You'll also lose your no-claims bonus if it's the first claim you've been on the receiving end of a claim. The amount by which your insurance rates increase may vary a great deal.

Does your insurance go up everytime you make a claim?

The greater the number of claims filed, the greater the likelihood of a rate hike. File too many claims—especially in a very short amount of time—and the insurance company may not renew your policy. If the claim is based on the damage you caused, your rates will almost surely rise.

What happens if you don t use all the money from an insurance claim?

If you don't use insurance money for repairs, the consequences depend on the terms of your insurance policy and the type of damage involved. For example, if your lender requires repairs on a financed home or vehicle, failing to use the funds as intended could violate your loan agreement.

Do I get paid if someone hits my car?

If you can prove that a specific vehicle/person was responsible for the crash, and they have insurance, or money for damages, yes.

Should you file a claim if I'm not at fault?

» FAQs » Should I Call My Insurance If a Car Accident Was Not My Fault? Yes, you should call your insurance company if you were in a car accident that was not your fault.

What to do if someone claims you hit their car?

What to Do If Someone Falsely Claims You Hit Their Car
  1. Evaluate the Situation.
  2. Speak to the Other Party Politely.
  3. Take Photos and Videos.
  4. Gather Witnesses.
  5. Check for Nearby Cameras.
  6. Report the Incident.
  7. Explain Your Side Clearly.
  8. When to Consult an Attorney.

What happens if you don't call your insurance after an accident?

Failing to contact your insurance company shortly after being in a car accident can lead to them denying your claim. Waiting to contact your insurance company can also make it more difficult for the insurance company to investigate your case, which could lead to you receiving a lower settlement amount.

What is the downside of filing an insurance claim?

It could increase your premiums

When determining your premiums, insurance companies consider your likelihood of filing a future claim — which could cost them money. The higher your perceived risk, the more likely you are to pay more in premiums. Your claims history tends to play a direct role.