Cashing a check from Geico, what should we know?

Insurance Forum Auto Insurance
1

My husband and I were just a week away from selling our car and upgrading to an SUV. We had an offer for $19,000, but then someone backed into it while it was parked, leaving a big dent on the door and rear side.

We reported it to the other driver’s insurance (Geico), uploaded photos, and got an estimate the next day. Their offer seems low, but they are sending a check and told us to “please accept it.” We want to take it to our own shop for a full estimate and repair. We’ve never been in this situation before, so we have a few questions:

  1. How does a diminished value claim work? The accident will now show up on CARFAX, and we know that will affect the sale price. We plan to file a diminished value claim after repairs.

  2. If we cash the check, does that mean Geico won’t pay anything more if the repair shop finds additional damage?

  3. Let’s say Geico’s initial check is for $1,500, but the shop finds $5,000 in actual damage. If we decide not to repair it, can we still get the full $5,000, or are we stuck with the first offer?

Would appreciate any advice. Thanks!

2

  1. It depends on your state and the type of car you have. Some states allow diminished value claims, but the amount varies.

  2. No, if the shop finds more damage, they can file a supplement request with Geico. The insurance company will usually cover the additional cost if it’s valid.

  3. That probably won’t work. Shops usually require you to sign a ‘direction to pay’ so the money goes directly to them. If you decide not to fix the car after they’ve taken it apart, you may have to pay out of pocket for their labor. Most shops won’t put the car back together unless the repair is done. So if you’re thinking of pocketing the difference, it’s not that simple.

3

@Ava
Got it, thanks for the explanation!

4

  1. The check is just based on the photos you sent. Once a shop inspects the damage, they’ll likely find more issues and submit a supplement request to Geico for additional payment.

  2. To file a diminished value claim, the repairs need to be completed. Some states don’t allow diminished value claims, so you’ll have to check. The amount you get depends on the car’s age, mileage, and extent of damage. If it’s an older car with high mileage, the payout may not be much.

  3. The first check is yours to do whatever with since you own the car outright. But once it’s in the shop, any additional payments will go directly to them. Insurance companies don’t usually send extra money to the owner after the shop submits a higher estimate—they send it straight to the repair shop to prevent people from cashing out and not fixing the car.