Just saw this thread and though I'd add my thoughts on the question posed "What kind of fly by night insurance company would settle the case using PayPal ??? If you have a reg checking account at a traditional bank why did they not sent you a traditional check ?"
I was paid out by my insurance company this past year through Paypal when I totaled my car. I found the replacement car I wanted to purchase and I needed the insurance claim money immediately to purchase it. The insurance company said the check or transfer to my regular bank account wouldn't arrive to my account until after the weekend. But they could get the money to me immediately via Paypal. Since I didn't want to lose the car I wanted to purchase I went ahead and requested they use Paypal. I had no idea it would be reported to the IRS by Paypal until after the transaction happened.
Anyway, that is one reason someone may get a payout through Paypal from an insurance claim.
