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Should I Cash The Settlement Check from The Other At-Fault Driver’s Car Insurance Company?

A client called to inquire about a settlement check received from the other (at-fault driver's) insurance company. Prior to this the client was involved in an accident where he was rear-ended from behind while legally stopped. He wanted to know whether to cash the check or not? Our advice to him was - DO NOT DEPOSIT THE CHECK!!

When you deposit the check that means you have accepted their settlement offer and waived all future legal actions or bring up additional claims resulting from the original accident.


In this case, our client received the check for the auto repair while his car was still at the auto body shop. (This insurance carrier had accepted 100% liability and agreed to repair his car.) Instead of negotiating the cost of repair directly with the body shop, this insurance carrier bypassed the body shop and sent the check directly to the client - in hope he cashes it. Should the final repair cost exceeds the deposited check amount, the client maybe responsible for the difference. The insurance carrier could take the stance that "you agreed with the original amount we offered because you deposited the check - case closed."


Our suggestion is to not get caught between the insurance carrier and the body shop - by REJECTING THE CHECK. Since the insurance carrier had agreed to repair your car, just drop it off and pick it up when ready. Let the body shop and the insurance carrier negotiate the cost of repair.


Resist the temptation. Don't take the bait. Any question? Feel free to contact us.

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