Auto Insurance Claims: cash out claim, state insurance department, insurance estimate

Question
I have an Ins. claim in which a tree fell on my vehicle and dented several panels.  I received an estimate from a bodyshop and my insurance company wrote an estimate for a little less than the shop. I own my vehicle. outright and may not fix it at this time.  I told the adjuster this and he refuses to cut me a check.  And will only cut a check to the bodyshop.  I told him I might repair it myself and was told that they would then pay even less than the original insurance estimate because i don't have the same overhead as a dealership bodyshop.  Is this legal??  People cash settle all the time and I am basically being told I can't or if I do I will need to take less than what their appraiser wrote.  I don't understand please let me know if there is anything I can do?

Answer
No, this is not legal.  They can't do this.  However, if you cash settle, they may not want to insure your vehicle anymore because it has damage.  They can do that.

I suspect the adjuster is inexperienced and does not know this.  You should ask to speak to his/her supervisor.  If you do not get satisfaction, file a complaint with the state insurance department.