This is a very slippery slope. I always kept the customer in the loop and in constant contact with the insurance company. Now if the customer wanted a specific shop to do the work I ok with the insurance company cutting the check directly to the repair facility. If the dealership did the work and for the less then the check amount the surplus had to be returned to the customer although we did make a concerted effort to get them to apply it to their account. Now, maybe different states have different laws and different contract..so i can't be 100% here only speaking from personal experience in dealing Pennsylvania and North Carolina.
Robert