Keep in mind that your car's VIN number is in the record now as having been involved in an accident. That is now noted in the insurance industry's database. If you have it repaired by their shop, their shop will forward a report of the repairs and that will be noted in the database. If you have it repaired by a shop of your choice, you need to get that fact reported (your insurance agent can make sure it happens). If you don't get it repaired and that fact noted, then your car is pegged as "damaged goods." If you're in a subsequent accident, your settlement will be far less because your car was damaged before the accident, prior damage. You can have a little fender-bender and barely scratch the paint and decide to pocket that $500 check, and then a year later get T-boned and have a total loss and the insurance company will try and screw you over big-time; they'll try and claim that it was all prior damage. You got rear-ended a year ago and barely that and the insurance company will now try to claim that that mangled door -- the one the fire department had to pry open with the Jaws of Life -- and front fender that's now one with the engine block were pre-existing, un-repaired damage left from the previous accident and not their liability.
Oh, and if you go to sell your car, the report of the accident and the lack of proper, professional repair will be waiting for a prespective buyer on carfax.com for $20. If you go to trade it in, dealers get a bulk rate on carfax. They'll pull that report for $5 and then they'll screw you with it.
Consider, for example, a very minor scratch-and-dent sort of fender-bender. The damage is very minor. You've got a friend who's an amateur body guy. You buy him a case of beer, a can of Bondo, and some factory-original paint and he does a beautiful, masterful job, better than any body shop would have done. You pocket the $500 less the $20 for the beer and $20 for the materials. Then, a year later, you go to trade the car in and carfax.com says it was involved in an accident that you never had fixed. You can talk all you want to about how good your friend is and they're still gonna screw you on the price. Why? Because when they go to sell it, any knowledgeable buyer will pull the carfax report and screw them.
So, if you're committed to keeping this car until it falls apart, pocket the settlement. But if you want to keep the resale value of your car intact, you'd best get it fixed by a professional shop.
