Severe weather can hit in an instant and wreak havoc on everything in its path — including your car. If your car is pelted by softball-sized (or even pea-sized) hailstones, it may get unsightly dents and widespread damage.
The cost to repair the damage can be pretty steep, and unrepaired hail damage can decrease your car’s resale value, potentially by quite a bit. However, if you carry the right insurance, you may be in luck. Continue on to find out about how hail damage can affect your car insurance and resale value, what you’ll need to consider when it comes time to repair the car, and what to do if your car is declared a total loss.
Will Reporting Hail Damage Affect Your Car’s Value?
Hail damage can do more than just damage your car’s appearance — it can also lower your car’s value, even with just a few small dents, whether you report it to your insurance company or not. If you’re concerned about the resale value of your vehicle, it’s probably a good idea to get all dents and dings repaired. Even a few minor cosmetic flaws can lower your car’s appraisal value from “good” to “fair,” or even “poor.”
Sites like Kelley Blue Book, a trusted resource for purchasing vehicles, define cars of “good” value to have minor scratches, dings, dents, or blemishes; cars of “fair” value to have dents, dings, and scratches that need repair, or paint that needs refinishing; and cars of “poor” value typically aren’t even listed, but include any damage worse than dents, dings, and scratches.
If you report the hail damage and receive money to cover the repairs, it is generally within your best interest to get the repairs done (and not simply keep the check). The experts at Merton Auto Body, a repair shop in Wisconsin, state that severe, unrepaired hail damage can decrease the value of your car by up to one third.
Minor flaws will affect your car’s resale value when you get it appraised, but they shouldn’t be enough to total your car, so the damages won’t appear on your vehicle’s title. However, keep in mind that if you report the damages to your insurance company, the repair will likely show up on vehicle reporting systems like CARFAX or AutoCheck, which can also affect the resale value of your car.
Should You Claim Hail Damage on Your Car?
Auto insurance policies cover hail damage, provided you have comprehensive coverage. This type of coverage includes several hazards, including fallen branches, vandalism, and hail damage. You will have to pay your deductible amount first, so note that minor hail damage may not be worth claiming if the deductible amount is more than the repair costs. For more about this, our article details the cost of repairing a hail-damaged vehicle.
Unfortunately, if you purchased liability only on your car insurance policy, you will not be covered for hail damage. Hail damage is only covered if you hold comprehensive coverage.
In general, claiming hail damage will not raise your car insurance rates. Since natural occurrences (including hailstorms) are unforeseeable and completely out of your control, the damages they cause are not typically held against you when it comes to insurance claims. Therefore, if you are able to claim hail damage on your car, it is generally in your best interest to do so. The only exception to this is if you’ve recently submitted other claims. Multiple claims may result in rate increases, regardless of the origin of the claims.
How to File a Hail Damage Claim
It’s important to file a hail damage claim as soon as possible after the storm. You probably aren’t the only one affected by the hail, so it could take longer to get help after a storm. The sooner you call, the sooner you can get the situation under control.
Filing a claim for hail damage is the same as filing any other type of claim. You can either go online or pick up the phone and contact your insurance company to report the incident. Then, they’ll send someone over to assess the damage and determine the amount to reimburse you.
It’s beneficial to get a second opinion from the repair shop of your choice. If the estimate the repair shop gives you is inconsistent with the insurer’s estimate, have them contact your insurer with the information to get a revised estimate.
Can You Claim Hail Damage More Than Once?
You can claim hail damage more than once. However, by filing multiple claims in a short period of time, you could be labeled a “high-risk driver.” This could raise your insurance rates and make it harder to sustain car insurance from your current insurer, as well as make it harder to find another affordable insurance policy.
If you did not fix the damage to your car after the first hail damage claim, you won’t get paid twice for the same hail damage. In other words, your insurance company will subtract the amount of the first insurance claim from the second claim, and will likely take two deductibles, leading to a much lower payout value.
Can Hail Damage Total a Car?
Unfortunately, it is possible that your car could be totaled by hail damage. The following factors determine whether a car is declared a total loss:
- Your insurance company’s policies. Companies must follow certain state laws, but can set their own standards for totaled cars.
- Individual state laws. Depending on which state you live in, your car must have a certain percentage of damage to be considered a total loss. This percentage varies widely by state. Some states use what is called the “total loss formula” (i.e., the cost of repairs plus scrap value must equal the pre-accident value of the car), while others have a specific threshold set. For example, if a car has 50% of its pre-accident value, it’s considered a total loss in Iowa, while in Texas, it would be considered repairable.
- The vehicle’s condition. Can your car be repaired safely? Will repair costs total more than the vehicle’s worth? If the repairs won’t be enough to pass inspection or if they will be too costly — which can be the case with numerous large hail dents — the car will likely be declared a total loss.
If your car is totaled, your insurance company will take possession of the vehicle and issue it a salvage title. The specific criteria for issuing a salvage title varies by state, and not all states allow hail damage as an exclusive reason to issue one.
What Happens If the Insurance Company Totals Your Car?
If your car faces severe hail damage, your insurance adjuster may declare it a total loss. If this happens, your options will depend on whether you are financing your vehicle or you own it outright. If you own your car outright, you can choose between the following options:
- Take the money from the insurance company. This is probably the most common choice when cars are totaled. Your insurer will determine the car’s actual cash value (ACV) and send you a check for that amount. This amount is negotiable, but you’ll have to prove your case.
- Keep the car and fix it yourself. If your car is still safe to drive and has merely cosmetic damages, or if the settlement money isn’t enough to purchase a replacement, you may decide to keep the car and spend your own money to fix the damages. If you decide to go this route, let your insurance company know immediately. They’ll deduct the salvage value, or the total value of the damaged vehicle, and any remaining deductible value and you’ll get the remaining funds. Be aware, however, that you’ll then receive a salvage title for the car and it may be harder to get car insurance and even harder to sell it later on. An inspection will likely be required before you get the car back on the road. Note: Some states will not permit an owner to retain a car that is declared a total loss. Check your state’s individual laws.
- Keep the car and drive it as-is. Similarly, if your car is safe to drive and has merely cosmetic damages such as paint chips or small dents from the hail, or if the settlement money isn’t enough to purchase a replacement, you may decide to keep the car and not fix the damages. Remember that your state may have laws about keeping a salvaged car, and you will likely need to have the car inspected before you can get it back on the road.
- For more about driving a car with a salvage title, our article explains how to get insurance coverage for salvage title cars.
If you have an auto loan, the financial institution or lienholder will have the final say on whether or not you can keep your salvaged vehicle. Most likely, you will have to take the payout. If the insurance company’s ACV is less than the amount you still owe on your loan, you will be required to pay the difference unless you have gap insurance. Gap insurance will pay the “gap” amount still owed on a car loan that remains after the ACV has been paid by the insurance company. If the ACV is more than the amount you owe on your loan, you can use the extra money to put toward a new vehicle.
How to Protect Your Car in a Hailstorm
There are a few precautions you can take to prevent hail damage instead of waiting until your car is damaged by severe weather. First, know the places around the country where hail is most likely to happen. According to the Insurance Information Institute, Texas, Kansas, Nebraska, South Dakota, Oklahoma, and Colorado are typically the states with the highest number of major hail events per year.
If you live in a state prone to hailstorms, comprehensive car insurance coverage is a necessity. This will protect you from paying for repairs out of pocket if and when hail damage occurs. It’s also a good idea to keep your car in a garage or covered parking lot. If you happen to be driving when hail strikes, try to pull into a covered parking area or, at the very least, pull over to the side of the road to reduce the hail’s impact.
If your car’s been hit by hailstones of any shape or size, it may get minor, moderate, or even severe damage. The only way you will be covered for hail damage is if you carry a comprehensive auto insurance policy (liability-only policies will not cover hail damage). While your auto insurance rates should not be affected by claiming hail damage, your car’s value may decrease (possibly by up to one-third of the total value). If the hail damage is minor and the repairs would cost less than your insurance deductible, you may not want to report it. However, if the damage is severe, you will want to report it to your insurance so the company can cover the cost of repairs, thus protecting your car’s resale value. If your insurer declares the total loss, depending on your state’s laws, you can choose to take the settlement and buy a new car or repair the damaged one on your own, or, if the car is still driveable, you can simply choose to keep it as-is.
For more about repairing car damage after a hailstorm, we also provide the guide to repairing a hail-damaged car.