If you collect insurance money for cosmetic damage to your car are you lawfully required to fix the car or can you pocket the money?

No There is no law requiring that you repair cosmetic damage to a vehicle. In most states, if not all, you are legally required to use the money issued by an insurance to fix the vehicle. It usually states such somewhere in the insurance paperwork. That said, no one's going to follow up with you to check where the money went. If there is a loan against the car, the lender will insist that the repairs be made OR the loan reduced by paying them the FULL amount of the reduced value. Also, if repairs are not made your insurance will not pay to repair the same parts again, and may be reluctant to pay for any additional damage. Say you just have minor dents in the bumper and one fender but the car is still driveable so you pocket the cash and don't have it repaired. Then you smash the same bumper and fender next week (or next year) but this time it's pushed back and rubbing on the tire so you can't drive it, the insurance company is going to tell you that they've already paid you for those parts.