Why You Should Keep That Extra Cash from Your Car Insurance Compan

Being involved in an accident can be very stressful, especially if you were the one at fault. If you’re fortunate enough not to have any injuries, your car might still have some damage that needs to be repaired or replaced. Unfortunately, car insurance companies don’t always offer the full cost of the repairs—sometimes they give you much less than what you need to get everything fixed. While it might seem tempting to take the check and run, think twice before accepting it and give these reasons for keeping that extra money from your car insurance company instead.

Get a copy of your credit score

Your credit score is a number determined by your past credit history and can have a huge effect on your personal life. Credit scores are used to determine how much you're going to pay for things like loans, mortgages, and insurance. Many banks require you to have a certain score in order to get an account with them. A low credit score could mean that you won't be able to get the house of your dreams or the car you've always wanted. It may even mean that you'll end up paying more for insurance because your premiums will be higher than someone else who has a better credit score.

Know how much you can borrow

One of the easiest ways to get more cash is by taking advantage of the money you're owed, but don't actually need. For instance, when you buy a new car, your car insurance company may send you a check for the difference between what your old car was worth and what your new one is. This money is yours to keep and can be put towards whatever you want. Take some time to figure out how much you can borrow by looking at your monthly statements and taking that amount into consideration before shopping around for loans or other expenses. 

The following are three additional reasons why saving this extra cash could benefit you: 

1) Interest rates on loans are typically higher than the interest rates offered on investments or savings accounts. 

2) Saving money in an investment or savings account doesn't offer guaranteed returns like it does in some stocks, bonds, mutual funds, or other types of investments.

Look for cashback offers and discounts

Once you've filed a claim with your car insurance company, there's no need to worry about forgetting to send them the money. Instead, take advantage of any discounts or cashback offers that come along with your policy and apply these savings to the balance you owe. This will help lower the cost of your monthly bill and keep money in your pocket. Additionally, if you have a credit card that provides rewards points for paying balances on time, use it when paying off the difference between what your insurance covers and what you owe. If all else fails, consider asking family members or friends for some extra funds until the balance is paid off so they can benefit from these same incentives too!

Consider renting before buying

One of the many reasons why you should keep that money is because it gives you an opportunity to try out a home before making a purchase. This can allow you to see if the location is what you need and if the school system meets your family's needs. It could also allow you to see how much work would be needed in order for your home to feel like home. For example, do you prefer newer fixtures or do you want more traditional ones? There are many factors to consider when renting, but this one can help weed out houses that just don't suit your needs.

Save up to buy something better later on

Now that you have a little extra cash on hand, it's time to start thinking about what you want to do with it. The best way to make the most of your money is by investing in something that will help you save in the future. Try putting a small amount aside each month until your car insurance company sends you a check for 2022. Then, use the funds to purchase an annuity or invest in stock market index funds. Putting away a little bit of money every month into these types of investment vehicles can turn into huge payoffs down the line. The sooner you start saving, the better!

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