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

UPDATED: Aug 31, 2011

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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