What is a Direct Check? - Insurance Navy. In insurance, a direct check refers to a payment method where the insurance company issues an insurance check directly to the policyholder or the party who has filed a claim. This method is used when an insurance company has approved a claim, such as an auto insurance claim. The insurance claim check is usually for the amount equivalent to the assessed value of the claim minus any deductibles. The policyholder or claimant can use the insurance payment for repair costs, medical expenses or treatment costs, replacements, or other expenses related to the claim. The advantage of a direct check is that it gives the policyholder more control over how the insurance claim check is used. However, it also places more responsibility on them to ensure that all necessary expenses are covered. Sometimes, the insurance company may issue a direct check to a service provider, such as a repair shop or medical facility, instead of the policyholder or claimant.