Can I spend the money received from a legitimate comprehensive insurance claim on anything I want?

Or any part of it after repairs are made?

Asked on August 31, 2011 Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If the insurance company simply gives you a check, then yes--once the check is in hand, you can do whatever you want with it--as long as you had submitted an honest claim, based on accurate information, etc. If the insurer then chooses to give you a check for loss--rather than, for example, paying directly to contractors, repair persons, etc.--once you have the check, it's yours to do with as you want.

Some advice: don't spend it all immediately--hold some back. I say that because based on other questions I've seen on this site, it's not unheard of for an insurer to conclude that it somehow erred (e.g. calculated wrong; didn't hold back for the deductible; etc.) and want some of the money back. They can only get something back, of course, in the event of some legitimate error, supported by the terms of the policy and facts--but in cases like that, they can seek some reimbursement. Holding onto some of the settlement for a time helps cushion you against that, should it happen.


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