Whether you must repair your car after an accident and insurance claim depends on the circumstances. If you still have a loan on the vehicle, your lender will demand the repairs.
Can I Repair the Car Myself?
If there’s a lien on your vehicle, you likely won’t be allowed to repair the car yourself. Your lender may even require you to use an approved repair shop—or at least one that guarantees its work. If you own your car outright, you may be able to fix the car yourself. Check your insurance policy, or ask your agent. Just be sure that doing your own repairs won’t affect your coverage.
What If I Have a Car Loan?
If you have a loan on your vehicle, it means you should get the car repaired. Your lender may assign or need to pre-approve the mechanic. Your lender will want their collateral—the car—to be fully working and want you to repair any damages. If you are still making payments on the loan, you do not own the car free and clear. As a partial owner, it is your duty to get the vehicle repaired in a timely fashion. Many lenders require that they are listed on your auto policy as a loss payee, to ensure you have full coverage on the car at all times. That’s also how lenders know whether a claim was filed.
Could I Lose Insurance If I Don’t Repair the Car?
The insurance company will require repairs if you want to continue your vehicle’s comprehensive or collision coverages. The insurance company does not want to keep insuring a vehicle for future physical damage if the vehicle was already damaged and not repaired. A second accident would compound any existing damage. If the insurance company paid you once for the pre-existing damage, it would not want to pay you more for any compounded damage. It’s standard procedure for the insurance company to require you to drop physical damage coverage from a vehicle that was not repaired. Proof of the repair is usually handled by making a claim check out to both you and the body shop doing the repairs. Owning your vehicle outright gives you more flexibility when it comes to repairing your car or not. An insurance company will often give you the option to total the car out or buy it back. That is the option of giving you the car back, plus the cash value of the car, minus the auction price the company believes it would have received from a salvage yard. When it comes to buying back your totaled vehicle, anything causing a major safety issue will need to be repaired. States may also differ in what they ask to get the vehicle back on the road. For instance, New Jersey requires a salvage certificate for vehicles over eight years old. It then requires a special inspection to be sure the vehicle is road-worthy. Insuring the vehicle, in this case, would depend on the inspection results and may not be worth the expense. Frame or other structural damage could cause an insurance company to deny coverage. You should always check with your claim adjuster about insuring a previously totaled car.
What If I Don’t File an Accident Claim?
It is common for a driver to opt not to report a claim to the insurance company. You may want to avoid a rise in premiums. It could be a single-car accident (your fault), which many policies may not cover. If you can afford the repair, you may not want to report the claim. If another vehicle is involved, you may have no other choice but to file. It is tempting to use insurance claim money on other things than car repair. This can be true when the damage is cosmetic and you need the cash. If you want to sell your car down the road, making the repair will help keep the car’s value intact. If you really need the cash, you can always have the repairs done at a later date. Just let your insurance agent know when the work is complete so you can restore physical damage coverage.
