Hailstorms can be incredibly damaging to vehicles, leaving dents and dings across the body. If your car has been caught in a hailstorm, you might be wondering, “Do you have to repair car hail damage?” The answer isn’t always straightforward and depends on a few key factors, primarily car ownership and insurance coverage. This article will break down your options and help you understand your obligations and the implications of repairing or not repairing hail damage.
Ownership and Repair Obligations
Whether or not you have to repair car hail damage largely hinges on whether you own your car outright or if you’re still paying off a loan.
Owning Your Car Outright
If you hold the title to your car free and clear, meaning there are no liens or loans against it, then no, you are not legally obligated to repair hail damage. It’s your vehicle, and the decision to repair any damage, including hail damage, is entirely yours. You can choose to live with the dents, get them repaired immediately, or wait.
However, there are important considerations even when you own your car outright, especially concerning insurance. If you choose not to repair the hail damage and your car is hit by hail again in the future, your insurance company will not pay for the same damage twice. They will typically subtract the amount of your previous hail damage claim from any subsequent claim. For instance, if you received a $2000 insurance check for hail damage but didn’t repair it, and a second hailstorm causes further damage, your insurer will assess the new damage and deduct the $2000 from the payout. You’ll essentially only receive compensation for the new damage, not the pre-existing hail dents.
It’s also crucial to remember that you will likely be responsible for paying your deductible for each separate hail damage claim, regardless of whether you repaired the damage from the first claim. This means you could be paying multiple deductibles without actually getting your car repaired.
Cars with Liens
The situation is different if you still have a loan or lease on your car. In these cases, you don’t fully own the vehicle; the lender or leasing company (the lien holder) does until you’ve paid it off. When you file a hail damage claim on a car with a lien, the insurance company will typically issue the repair check differently.
Insurance Claims and Hail Damage Repair
Understanding how your insurance company handles hail damage claims is vital in determining your repair process.
How Insurance Handles Hail Damage Claims
When you file a hail damage claim, your insurance company will assess the damage and determine the repair cost. They will then issue a check to cover these repairs, minus your deductible. However, if you have a lien on your car, the check is often not made out solely to you.
Deductibles and Multiple Claims
As mentioned earlier, insurance companies will apply your deductible to each separate claim. So, if you file two hail damage claims, you’ll likely pay your deductible twice, even if you haven’t repaired the vehicle after the first claim. This is an important financial consideration when deciding whether to repair hail damage, especially if you live in an area prone to hailstorms.
Lien Holder Involvement in Insurance Checks
For vehicles with liens, insurance companies usually issue checks in one of two ways to protect the lien holder’s interest in the vehicle:
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Check Payable to You AND Your Lien Holder: In this scenario, the insurance check will be made out to both you and your lien holder. The lien holder wants to ensure the car, their collateral, is repaired. They will typically require proof that the hail damage repairs have been completed before they will endorse the check, allowing you to deposit it. This often involves you paying for the repairs upfront, getting a receipt, and then sending the check and receipt to your lien holder for endorsement. Some auto body shops or Paintless Dent Repair (PDR) companies may offer to hold a personal check until the insurance check is endorsed and deposited, streamlining the process. It’s also worth noting that some lien holders might allow you to use the insurance check to pay down your loan balance if you choose not to repair the hail damage. You should contact your lien holder to discuss this option.
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Check Payable to You AND Your Repair Shop: This approach can be more convenient. The insurance check is made payable to you and the repair shop of your choice. This method simplifies the process as the repair shop can often work directly with the insurance company. If you negotiate a repair price lower than the insurance check amount, the repair shop may endorse the check back to you for the difference after you pay your agreed upon amount. However, it’s important to be aware that repair shops receiving such checks will typically receive a 1099 form and be taxed on the full amount of the insurance payment.
Direct Payment vs. Joint Payment Checks
Occasionally, and especially for smaller claims, insurance companies might issue a check directly to you, without requiring a lien holder or repair shop endorsement, even if you have a loan. This often happens when the repair amount is below a certain threshold, perhaps around $2500. Some speculate that insurance companies do this hoping policyholders will simply cash the check and not repair the damage, potentially saving the insurer money in the long run. This practice is sometimes seen even when the actual damage estimate might be higher, leading to concerns about insurance companies potentially “lowballing” initial estimates.
Factors to Consider Before Deciding Not to Repair
While you may not always be required to repair car hail damage, especially if you own your car outright, there are several factors to consider before making that decision:
Diminished Value
Hail damage, even if cosmetic, can diminish your car’s resale or trade-in value. Visible dents can make your car less attractive to potential buyers and may lead to lower offers. Repairing the damage can help maintain your vehicle’s value over time.
Future Claims and Deductibles
As discussed, not repairing hail damage can complicate future hail damage claims and potentially result in paying multiple deductibles without getting your car fully restored.
Vehicle Aesthetics and Resale Value
Beyond monetary value, the appearance of your vehicle is also a factor. Hail damage can be unsightly, and repairing it can restore your car’s appearance and your pride in ownership. If you plan to keep your car for a long time, the cosmetic aspect might be less of a concern. However, if you anticipate selling or trading in your vehicle, repairing the hail damage is generally advisable.
Conclusion
So, do you have to repair car hail damage? Legally, probably not, especially if you own your car outright. However, practically, and financially, repairing hail damage is often the most sensible course of action, particularly if you have comprehensive insurance coverage. Consider your ownership situation, insurance policy, the extent of the damage, and your long-term plans for the vehicle when making your decision. Understanding your options and the potential consequences of each choice will empower you to make the best decision for your individual circumstances.
