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The short answer is that yes, you can choose to do whatever you want with the insurance money, but you need to ask yourself whether or not this is the best decision. If you need the cash more than you need to pay for the repairs, then this might seem like the correct decision.
The most widely accepted means of calculating paint and materials on an estimate is multiplying the number of refinish hours an on estimate by a specified hourly rate.
If the settlement was used appropriately and you have leftover money, your insurer may let you pocket the remaining amount, assuming you don't have an exclusion in your policy that forbids you from doing so.
Under California law, if a provider does not contest a notice of overpayment, he or she is required to reimburse the insurance plan for the amount requested, within 30 working days of receipt of the notice.
Yes, you may be able to keep the check from your insurance payout without fixing your car, but first you'll have to make sure you satisfy any lienholder requirements.