Every year, people in America spend an average of $1,070 on their car insurance. While this might seem like a lot of money a good insurance policy can provide serious financial relief if your vehicle is damaged, stolen, or involved in an accident.
However, with more than 400,000 insurance brokers and agencies across the US, choosing the right provider and coverage for you can feel overwhelming. This is why it is important to understand the type of coverage on offer and what you want before signing up for a policy.
If your car is damaged, for example, you will want a policy to help you cover the repair costs. So does car insurance cover repairs? Read on to find out more.
What is Car Insurance?
Car insurance is a type of financial protection that every car owner in America should have. In fact, this is a legal requirement in every American state apart from New Hampshire. Even if your car is parked off-road most of the time it will need some sort of basic insurance coverage.
This coverage protects the financial investment that you have made in your car. It means that if your car is lost, damaged, or stolen you can claim financial help repairing or replacing it.
In exchange for insurance coverage, you pay monthly or annual auto insurance premiums. These are much cheaper than the cost of replacing a car or repairing it by yourself.
Your insurance premiums vary depending on the type of coverage that you want for your car and your driving history. For example, new, young drivers are more likely to be involved in a car accident. Because of this, the insurance premiums for 16 to 21-year-olds are usually more expensive than they are for drivers in their 30s and 40s.
If you are involved in a car accident or damage your car then you can make a claim with your insurance. Generally, you will need to pay a small deductible before the company will payout on your claim. Once you have done this they can provide financial support up to the amount detailed in your insurance policy.
How Does Car Insurance Differ From Warranty Coverage?
When you first buy a car, you may be offered an auto warranty from the manufacturer or car dealership. This can also provide financial support if your car is damaged. However, this is different from an insurance policy.
Most car warranties last for a number of years after you buy the car. They guarantee that the manufacturer will repair mechanical faults if anything goes wrong during this time. For example, a warranty can cover oil changes, filter changes, and mileage repairs.
This is useful if your car needs repairs that have not resulted from a specific incident. Making claims for these kinds of repairs with your insurer can be difficult, so it is handy to have a warranty to fall back on.
After a number of years, most car warranties expire. However, some manufacturers will let you take out an extended warranty after this so that you still have some coverage.
It is important to note, however, that warranty coverage is not an alternative to car insurance. Legally, you must still have insurance and many states will ask you to provide this when you register your vehicle.
What Are the Minimum Insurance Requirements in America?
Most states in America have a minimum requirement for car insurance coverage. Every insurance provider should offer this in their basic policies. This usually includes:
- Bodily injury liability insurance (also known as BI)
- Property damage liability insurance (also known as PD)
Every state, except for Florida, requires drivers to have bodily injury insurance. The minimum requirement depends on where you live. It ranges from $15,000 per person or $30,000 per accident to $25,000 per person or $50,000 per accident in states across America.
The minimum requirement for property damage liability also varies depending on where you live. In some states, this is as low as $5,000 per accident, while in others it is $25,000 per accident.
Because of this, the cost of car insurance can vary a lot depending on where you live.
Around 50% of the states in America also require drivers to have uninsured motorist insurance (UIM). In some states, you also need to have personal injury protection insurance (PIP). This is a legal requirement in Maryland, New Hampshire, North Carolina, South Carolina, Vermont, Washington DC, and West Virginia.
Bodily injury and property damage liability are in place to cover another driver’s injuries, car, or property damage. Use can use this if someone makes a claim against you.
Uninsured motorist coverage benefits you and your car if you are involved in an accident with an uninsured driver. Personal injury protection can also provide extra coverage for any of your or your passenger’s injuries.
Types of Additional Car Insurance
Of course, you do not just have to stick to the minimum insurance requirement in your state. Finding the right insurance coverage is all about what you want. In the same way that you can add final expense insurance to your life policy, you can extend your car’s coverage!
For example, if you own a very valuable car you will want to take out extra coverage against its value. If you do not do this, then your insurance company may not pay out enough to cover the cost of a new car if yours is stolen.
Most insurance providers also offer a range of extra insurance policies for you to take out. Some popular options include:
- Collision insurance
- Comprehensive insurance
- Medical payments coverage
- Gap insurance
- Towing and labor insurance
- Classic car insurance
- Flood and weather damage insurance
- Additional drivers insurance
- Contents insurance
These additional insurance policies will mean that you have to pay more for your insurance premiums. However, it means that you will have coverage in a wider variety of scenarios.
For example, if you have taken out a car loan to buy your vehicle it is a good idea to invest in gap insurance. This will provide coverage if your car is stolen or damaged until you have paid the loan off. This means that you will not be left with a huge debt to manage and no car to drive.
So can your insurance help with vehicle damage and car repairs? Let’s take a closer look.
Does Car Insurance Cover Repairs?
Your car insurance policy can cover the cost of car repairs. However, this depends a lot on the cause of your repairs and the type of coverage that you have.
For example, if a flood causes your car damage then you will need to make a claim for the damage using flood insurance. If you do not have this type of insurance coverage then you may not be able to make a claim for the cost of your repairs.
Your car insurance policy will also detail the types of repairs that it covers. This often includes:
- Electrical system coverage
- Repairs to your air conditioner and cooling or heating systems
- Fuel system repairs
- Transmission repairs
- Engine repairs
- Bodywork repairs
- Glasswork repairs
As you have probably noticed, some of this will also be covered in a manufacturer’s warranty. Combined, your insurance and warranty can provide comprehensive coverage for your car’s repairs.
That said, it is always important to read the fine print. This will tell you when you can make a repair claim and how much you can claim. It may also provide detailed instructions on where to go for repairs and how to make a claim.
If you do damage your car during a car accident, for example, you may need to provide invoices for repair costs from specific, approved mechanics. This means that you may have to cover the cost of your repairs upfront before making a claim.
If you use an unapproved mechanic or fail to obtain receipts for the work then this could jeopardize your claim.
How Do Car Insurance Providers Calculate Repair Cost Coverage?
Insurance providers will be very careful about calculating the accurate costs of your repairs. They will use this to decide how much financial support you are entitled to.
As we already mentioned, this may involve asking you to use approved mechanics for your repair work. These are mechanics that your provider has inspected and who they trust to do a good job on your car. Your insurance provider will also be familiar with their approved mechanic’s pricing strategies.
If you want to make a claim for repair costs most insurers also have one strict rule. This is that you cannot use your repairs to improve your car beyond its current value.
For example, you can repair the engine to its current state but you cannot improve it using updated parts. This means that you must use repair parts that match the current value of your car.
This rule is in place to protect your insurers financially. A lot of repair mechanics will recommend making additional minor improvements during a repair job. For example, they might suggest updating your heating system or installing the latest GPS system.
However, this will be more expensive than simply repairing the vehicle damage and your insurance will not cover this.
To help calculate these costs, your insurer will evaluate your car’s value when you sign up for your policy. They will take into account:
- How old your car is
- Your driving history
- The car’s mileage
- Its annual maintenance reports
- The number of previous drivers that your car has had
Throughout the duration of your policy, your insurer will use this valuation to cap the cost of car repair claims that you want to make.
When Does Insurance Coverage Not Include Car Repairs?
As we have already mentioned, you need to have the right type of insurance coverage to make a claim for your repair costs.
Bodily injury and property damage liability insurance will not cover repair work on your own vehicle. This is where getting uninsured motorist insurance, collision coverage or comprehensive coverage can help.
However, in some circumstances, it may be more difficult to make an insurance claim. You will need to provide proof that links your vehicle damage to an incident. This can include:
- Photos or videos of the damage
- Eye witness accounts or CCTV footage of the incident
- Police reports of a car accident
In particular, insurance companies will also want to see proof that your car had been properly maintained before this. If you have not maintained your car then this could also have contributed to mechanical faults or damage.
Your vehicle handbook should include a recommended maintenance schedule. Most manufacturers recommend servicing it every 12,000 miles or once a year.
Your insurer may ask you to provide proof, such as service receipts, to show that you have properly maintained your car. Without this, your claim may not be successful.
What Happens If Your Repair Costs Exceed the Value of Your Car?
In some cases, vehicle damage can be very extensive and the cost of this will quickly add up.
An experienced mechanic will need to review the damage to your car and recommend the amount of repair work that needs doing. They should provide a quote for this in advance. At this point, you need to check that the cost of your repairs does not exceed the value of your car according to your insurance policy.
If it does then the insurance company will view your car as a write-off. In that case, you can make a claim for the value of the entire vehicle before the damage.
This means that you will be able to replace your vehicle using your insurance payout. Or, if you are sentimentally attached to your car, you can use the payout plus your own funds to repair your old car.
What Happens If an Accident You Caused Damaged Your Car?
There are more than 6 million car accidents on roads in the USA every year, so your chance of being in one is pretty high.
A lot of insurance policies operate on a no-fault basis. This means that even if you cause an accident you can still make a claim for your car’s repair costs.
However, this does depend on you having the right type of insurance coverage. Bodily injury and property liability coverage all focus on other drivers’ costs. This means that you cannot use them to make a claim for your own vehicle.
Fortunately, you can use collision coverage for your own vehicle if you caused an accident. This will have an impact on your insurance premiums and no-claims bonus. Nevertheless, you will be able to get financial assistance for your car repairs.
What If Someone Else is Responsible for Damaging Your Car?
Making a claim for your car repairs can damage your no-claims bonus. However, if another vehicle is responsible for damaging your car then you can make a claim against their insurance policy instead.
Their bodily injury liability can provide compensation for any injuries that you have sustained. And their property damage liability can cover the cost of your repairs. If you do this, you will be making a third-party claim because your claim involves the other driver, their insurer, and you.
To make a third-party claim you will need:
- The insurance details of the other driver
- Evidence of the damage caused
- Details of the estimated costs of your repairs
- Evidence to show that the other driver was responsible for the damage
As with your own insurance claims, you can only claim for repair work that restores your vehicle to its pre-accident value. So you must not use these repairs to improve your vehicle.
If you do not have a copy of the other drivers’ insurance details you should be able to track these down. Their vehicle registration details will also provide insurance information. You can find these using their license plate or by looking at the police report of your accident.
Of course, third-party claims generally only apply to car accidents involving multiple vehicles. So if extreme weather or theft has caused your vehicle damage you won’t be able to make this type of claim.
If you have it, you can also use uninsured motorist coverage to make a claim for vehicle damage that wasn’t your fault. You can use this if you are involved in an accident with an uninsured driver. You can also use it if someone steals your car and then crashes or damages it intentionally.
How Do You Make a Claim For Your Vehicle Damage?
If you want to make a claim for your car repair costs then you need to do this as soon as possible. Some insurers will provide time limits for making a claim so you should check for any deadlines in your policy.
To start with, you need to report your car’s damage. This might involve telling your insurer that you were in a car accident, reporting a theft, or recording weather damage.
Most insurers will want to see proof of this incident. If someone has stolen your car, for example, you will need to report this to the local police department. Your insurer will ask to see the police report for this.
Alternatively, for flood damage claims you will need to report when the flood occurred and where your car was during it.
Once you have reported your car damage you can provide detailed evidence about this. This can include photos of your car’s damage and accounts about the cause of the damage.
Most importantly, you will need a mechanic to assess the damage to your vehicle. They should provide a breakdown of this damage, their recommendations for the repair work, and a quote for this. It is important that you tell them not to recommend work that will improve the car’s pre-accident value.
Once you have submitted this to your insurer they will review your claim and contact you about a payout.
What Happens If Your Insurer Disputes Your Claim?
Provided that you have the right coverage and details of your car repairs, your insurance company should pay out on your claims. However, in some circumstances, they may dispute a claim.
This can happen if:
- They believe that you failed to carry out routine maintenance on your vehicle
- They believe that you were driving negligently or unlawfully
- You provide false information in your claim
- You withhold information about the circumstances of your vehicle damage
- You withheld information about your car when you took out the policy
- You have failed to meet the deadlines for making a claim outlined in your insurance policy
- An uninsured driver was driving your car
When an insurance company rejects a claim they will provide reasons for this. You can then review these reasons and consider whether they are fair or not.
If you would like to appeal your rejected car insurance claim then you can also do this. In that case, you will need to provide further proof to support your claim, which disputes the reason for your rejection.
Find Great Car Insurance Coverage Today
If you’re wondering “Does car insurance cover repairs?” the answer is yes, provided that you have the right amount of coverage.
Because of this, it is important to take the time to find a great insurance policy with a reliable provider. This will ensure that you have all of the coverage you need to help cover repair costs. So what are you waiting for? Get in touch today to find out how The Insurance Files can help you get the coverage you need.