Will Auto Insurance Cover Pre-Existing Damage?

Last Updated on November 3, 2020

When you’re getting your car insured, there are several things that run across your mind. If you’re buying an already used car, there are logistical questions that you may need to sort out before making a decision. Driving without insurance is illegal in most states so you may need to figure out these intricacies before making a purchase. Here’s what you need to know about auto insurance and covering pre-existing damage.
car insurance covers pre-existing damage

New Car Insurance Will Not Cover Pre-Existing Damage

There’s very little chance new insurance coverage will pay for old physical damages to your car. For example, if you bought a second-hand car that already has pre-existing damage, the new insurance coverage you get for the car will not be valid. Chances are the previous owner attempted to sell you the car instead of getting the damages fixed. If that is the case, at the stage of negotiation you should try to knock off the price of the damage from the total cost of the car. While this won’t get you immediate cash in hand, you will be saving enough money to pay for repairing the damage later. You can also use that money to get yourself good insurance coverage to protect your car from any further damage. However, unfortunately, most insurance carriers may be hesitant to provide physical damage coverage to a car with pre-existing damage, in order to avoid insurance fraud. What should you do in that case?

What Coverage Can You Get?

While physical damage coverage for a car with pre-existing damage could be hard, the insurance coverage you can get without any hassle is liability coverage.

Physical damage insurance entails two main things:

  • Comprehensive Coverage: This is the coverage that offers protection in claims that do not involve a collision. Damage from anything “other than a collision” is covered in this insurance. This includes a car fire, theft, vandalism, or even if you hit a deer on the freeway. Comprehensive coverage pays for the cost of repairing the damage, minus the deductible.
  • Collision Coverage: Collision coverage is what you will need if you accidentally hit another vehicle or an inanimate object while driving. It is important coverage to have if your car is new and is valued at a high price.

Liability coverage does not protect your car from physical damage. It does, however, protect you from damages to another person’s property or for causing injury. Each state has its own minimum liability coverage requirements that you must obtain in order to drive your car legally. If you are purchasing a liability-only insurance policy, the company will not be bothered about minor pre-existing damage to the car.

But in order to get liability coverage, you need to declare that the pre-existing damage done to your vehicle is not a safety issue and does not impact the secure functioning of your car.

Looking for Physical Damage Coverage for Your Car

So if you own a car that has some pre-existing damage, should you just forget about getting new physical damage coverage? Well, if you look around hard enough and especially among the non-standard insurance carriers, you are bound to find something of use. But here are some things you may want to be careful about:

Don’t Hide the Damage

Be honest about the pre-existing damage in your car. An insurance agent will come to examine the car when you file a claim, so you may as well save yourself the risk of being caught for insurance fraud.

Documenting the Damage

In all likelihood, the company will want to document the damage once you have disclosed it. You will be asked to fill out a form where the damage is described in detail.

Non-standard insurance companies, however, have their own drawbacks. To begin with, there are several types of driver risks on the road. Non-standard insurance agencies are the go-to for high-risk drivers and if you are a preferred-risk driver, this may not be a good fit. Besides, there is also a good chance the insurance coverage will be expensive. But if you want to be careful, getting expensive insurance is better than having no insurance at all.

Final Thoughts

If you have pre-existing damage to your car because it is a second-hand buy, what you can do is make a considered decision before buying the car. Set a price that allows you to repair the damage on your own if your insurance will not cover it. If you’re filing a claim for new damage without reporting the old damage, simply be honest. Let the insurance company know you are only interested in filing a claim for the new damage. If you want, you can ask the company to draw out two separate deductibles for both the damages and they can be processed separately, as long as you had your insurance in order at the time of the previous damage.

If nothing else, ignore the damage. If it is a small dent or a scratch that you can live with, the insurance adjuster will ignore it too and only assess the new damage. As long as you don’t try to get the company to pay for the prior damage in the new claim, you are absolutely fine.

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