You’re smart to hold a healthy skepticism of insurance companies, especially when you need one to process a claim.
Whether it’s properly evaluating what your vehicle is worth or attempting to settle a claim quickly, you sometimes must advocate for yourself.
Is there anything you need to keep in mind when an insurance check is headed your way? Should you accept direct deposit or wait for a paper check?
Should I Accept Direct Deposit For a Car Insurance Company Payment or Wait for a Paper Check?
Can I take direct deposit from a car insurance company or should I wait for an insurance check in the mail?
That’s what a listener recently asked Clark.
Asked Frank in New York: “My car was recently hit by another driver while I was parking in a parking lot. The insurance company is giving me the option to receive a paper check or have the payment direct deposited to a debit card.
“Any risk with the direct deposit or should I just wait for the paper check?”
Settling a claim with an insurance company can be a hassle. It’s important that you first make sure that accepting payment doesn’t preclude you from getting more money. That’s especially true if your vehicle needs repairs and you don’t yet know what the final repair bill will be.
“Wait for the paper check,” Clark says. “And you’ve got to make sure that the check from the insurance company doesn’t settle the claim in full.
“If the cost of repairing your vehicle turns out to be more costly than the amount the insurer estimates on the check, which is very common, is this open-ended? Does the insurer have to pay more? Or are you waiving your future rights to the amount you’re really going to need to repair your vehicle?”
Typically, the agreement you’ll sign with the insurer cutting your check will make it clear whether you’re waiving future rights to additional funds if necessary to fix your car.
“You do not want to accept anything from them that restricts you from receiving what it actually takes to make you whole following the accident in the parking lot,” Clark says.
Good News: Fewer Parking Lot Accidents Taking Place
Clark noted that with the ever-increasing technology available in cars, it seems like parking lot accidents and mishaps have declined.
The team receives “far fewer questions” about parking lot accidents than it used to because of backup cameras and audible warnings, he says.
“I was backing up in a parking lot just last night. And somebody in another car just pulled right back,” Clark says.
“And instead of hitting the horn, I went back into drive and pulled forward. They obviously didn’t have a backup camera or didn’t use it.
“But the good news is that those parking lot mishaps are so much less frequent than they used to be because of the new technology.”
Final Thoughts
Getting an insurance payout after a car accident? Wait for a paper check, Clark says. And read the terms of acceptance closely. Especially if your vehicle needs repairs. Otherwise, if the repairs cost more than the insurer estimated, you could be out of luck for the difference.
