If I received a small check from my insurer for damage to my car’s fender, can I use that claim check to pay down my loan?

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If I received a small check from my insurer for damage to my car’s fender, can I use that claim check to pay down my loan?

My lienholder is on the check. I could likely get the repair’s made (at a later date) for less than the check.

Asked on December 30, 2014 under Accident Law, Connecticut

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Yes, as a general matter, you may may use a check from an insurer for other than repairs. However, the lienholder is on the check, you should check with them whether they expect you to use the check for repairs or whether they would have no objection to you using it to pay down the loan. Assuming the latter, you could use the check as you indicate.


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