Auto Insurance Claims: Comprehensive Claim, auto body shop, hail damage

Question
QUESTION: Hi Charlie,

I sustained hail damage to my vehicle and have GEICO insurance.  I filed a comprehensive claim on the day of loss and am set up to have the damage estimated this Friday.  When I called GEICO to set up this appointment, they required I go to one of their preferred body shops to get an estimate from a GEICO adjuster and then told me I could take it anywhere I'd like to get it repaired.  Does it make sense for them to REQUIRE me to go to a preferred auto body shop for an estimate?  It seems as though they should be having me go to a neutral exam station.  If they are preferred, I'm sure that means they've agreed to estimate at a lower cost to GEICO.  Also, they said they'd issue me a check in both my name and the name of the shop where I'm getting it repaired. If I just want to pocket the money, do I need to request the check only be issued in my name?  If so, is it OK to report a claim and pocket the money?

Thanks so much for your help,

Emily
Minnesota

ANSWER: Your instincts with regard to the body shop and their cozy relationship with Geico are on the money. You don't have to go to any shop to get the work done. In fact, you can take it to any shop you like and have Geico send an appraiser there to inspect the damage. However, if your car is financed they will always make the check payable to you and a shop, or put your lender on the check as well.

The money is yours to do with what you like, assuming you own the car free and clear. But if the car is financed, they have a duty to protect the interests of the bank in their lienhold, so in that case, you can't pocket the check and drive a damaged car. Unless, that is, you are able to get an appraisal of the car in its damaged state and show that its value exceeds the present balance of the loan. I have done that for insurance companies whose policyholders wanted to keep the proceeds of the claim and drive their cars as is.

---------- FOLLOW-UP ----------

QUESTION: Thanks, Charlie!  Since I only have a few months left to pay on the car, I believe I may be in luck.  I want to use the proceeds to pay off the car.  Is it a bad idea to talk about this with the GEICO adjuster? Should I just speak with my lienholder to make sure this goes smoothly?

Thanks again...

Answer
Sure, ask your Geico adjuster if you can use the proceeds of the claim to pay off the car. In fact, ask them to put your lender's name on the check and dicuss your intentions with the lender. The lender will take the balance of the loan from the check and issue you a check for the balance.