If I have vehicle damage that isn't bad enough to require work from the body shop (just fender bender) but I've filed an insurance claim, can an insurance company pay me directly based on estimated cost of the fix and let me choose whether or not to repair?
Kurt: If there is no lien on your vehicle and you own it, then "maybe".
But, insurance will note to your file with the photos of the damages, and "might" not renew your collision coverage, since did not fix, or, if they allow you to keep your collision coverage, then any damages (in the future) they will DEDUCT the amount of damages to this accident to the next accident.
In other words, if another accident and damages to the sides or other parts of the vehicle not involved in this accident would cover, but not in the prior area.
This is a question you ask your insurance adjuster.
No, the check will be made payable to you AND the body shop. That would be insurance fraud for you to get the money and not make the repairs.