Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Apr 21, 2020

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Things to Remember...

  • When you carry physical damage coverage on your policy, you can file a claim against your own insurance to help you pay for the cost to repair the vehicle after a loss
  • Comprehensive coverage pays for claims that are made for non-moving incidents and damage caused by acts of nature.
  • When you file a claim against your own policy, the insurer will cut a check to you or to the lender that will pay for the repairs. When the check is cut to a lender, the loss payee has to sign off on the check before you can cash it.
  • Some companies will follow up with you to inspect your vehicle shortly after the repair check has been issued.

Paying your premiums month in and month out will pay off when you need financial assistance to cover the labor that must be performed to get your vehicle back to its pre-loss condition.

While auto insurance safeguards you from footing the bill when you need to hire a professional who can buff out scratches or replace panels, after your claim is settled you can easily change your mind about getting the repairs done.

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When will your own policy pay to repair damage to your car?

Your auto insurance policy won’t always pay for your own vehicle repairs. If your car is damaged, you need to be sure that you have sufficient coverage before you pick up the phone to make a claim.

When you don’t have physical damage coverage and the insurer can’t attempt to collect from any other driver, your claim will be closed.

Since a basic insurance policy that includes only state-mandated requirements doesn’t pay for your own damage claims, building the right personal policy from the start is imperative.

Your policy will only pay for first-party damage to your covered auto or a temporary substitute vehicle if you carry one of the following coverage options:

  • Comprehensive – This coverage pays for claims made for damage to your car when it’s caused by fire, flood, falling objects, theft, vandalism, or contact with live animals.
  • Collision – This coverage pays for claims made for damage to your car when it’s sustained in a rollover accident or a collision.
  • Uninsured Motorist Property Damage – This coverage pays for claims made for damage to your car when the vehicle is damaged in an accident with a driver who doesn’t have insurance. If you don’t have collision insurance, the UMPD coverage will pay up to $3500 for repairs

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How much will your auto insurance company pay when you file a damage claim?

Your auto insurance company is only obligated to pay up to your car’s Actual Cash Value under the terms of the contract.

As long as the damage doesn’t exceed the car’s depreciated value, a check will be cut to cover the full cost to repair the car as long as the per hour rate for labor is reasonable. You should check to see what the carrier considers reasonable.

Will the company cut the check directly to you or to the repair shop?

If you’ve been offered a settlement from your insurer, you might start to think of all of the ways that you can use the money.

After all, a dented bumper or a scraped passenger door doesn’t affect how the vehicle runs. Before you start planning how you’re going to use the money, you might want to find out how the check is cut.

Some companies deal directly with affiliate repair shops. These are the shops the insurer will recommend that you use.

Unless you tell the company otherwise, the carrier will cut the check to the auto body shop that they refer clients to.

Luckily, if you tell the insurer you want to use another shop or repair the car yourself, you should have that option. If you choose this route, the check will be cut to you.

What if the vehicle is currently being leased or financed?

Your plans to save the settlement money or go on vacation can be thwarted if the vehicle that you’re making a claim on is financed or leased.

A loss payee clause means that the lender must receive notice when your policy changes.

Loss payees and additional insureds are also named on the claims check when it’s issued.

You can’t cash the check until the lender or lessor is willing to sign the check and give you permission to cash it. Some lenders and lessors won’t do this unless the money is going to the repair shop.

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What can happen if you keep the money instead of getting the repairs done?

There are dangers to holding onto the money and living with the damage. One of the drawbacks of doing this is that your company might ask to inspect your car to see if the repairs have been made.

If they haven’t, they may deny you the option to carry physical damage coverage. Some carriers will note that the damage exists so they don’t pay twice for the same damage.

If your car is financed or it holds some value, carrying comprehensive and collision may be worth considering. If you currently don’t have full coverage, you should see how much it costs.

Use an online quote comparison tool, enter your personal information, and determine if full coverage makes financial sense.

Enter your ZIP code into the FREE tool below to access car insurance rates from multiple carriers at once.