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Will my car insurance cover repairs?

Here's what you need to know...

  • In most states, you’re only required to carry coverage that will pay for third-party damages when you’re negligent for an accident
  • A basic auto insurance policy consists of Bodily Injury Liability and Property Damage Liability, but some states also require Uninsured Motorist Protection and Medical Payments coverage
  • Property Damage coverage pays for third-party repairs, and Physical Damage coverage pays for first-party repairs
  • If you want to buy coverage that will pay for your own damage repairs, you have the option to add comprehensive and collision to your policy for an additional cost
  • There is a limit to how much your insurer will pay for repairs. Under the contract, it states that your insurer will only pay for reasonable repair costs up to the car’s Actual Cash Value

Car insurance is a financial product that can come to the rescue when you have an accident. While a basic auto insurance policy will protect your assets and your future income, it will not protect your vehicle.

If you want your insurance carrier to come to the rescue when your car is damaged in a car crash, you need to have a comprehensive insurance policy.

Since not all car insurance policies cover car repairs, it’s important to do your homework before you start building your next policy.

You should familiarize yourself with coverage options and how they work when you’re filing a claim. If you want help to pay for your car repairs after a loss, here’s what you need to know.

Start comparison shopping right away to ensure you’re getting the best deals. Enter your zip code into our FREE tool above!

Table of Contents

Basic Insurance Policies Don’t Pay For Car Repairs

When you’re in a car crash, one of the first things that your insurer will do is investigate your claim. The purpose of the investigation is to determine who was at fault for the events that led to the collision.

If you’re deemed to be the at-fault driver, it’s your duty to restore the other parties to their pre-loss condition.

State officials mandate that all drivers carry auto insurance so that they are financially able to compensate victims in an accident when they cause injuries or property damage.

This is why a basic auto insurance policy that includes state minimum coverage requirements includes coverage that will pay for third-party medical bills and repairs.

What is the difference between Property Damage coverage and Physical Damage coverage?

Property Damage and Physical Damage sound like two interchangeable terms that you can use when you’re describing auto insurance benefits.

What you’ll learn as you are getting quotes for coverage is that these two coverage options couldn’t be more different. Knowing the difference can pay off in the end.

Property Damage is a form of liability coverage that pays specifically for repairs to cars, buildings, fences, benches and other types of property that you damage in an accident.

Physical Damage consists of two different forms of first-party coverage that pay to repair your own car after you suffer a covered accident or loss.

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What types of Physical Damage coverage are available?

Physical damage coverage is a very broad term. When you’re comparing quotes, you can choose to add both comprehensive and collision to your policy. Each of the two coverage options pays for repairs that need to be made to your vehicle after a specific type of loss.

Here’s a breakdown of what each coverage pays for under your insuring agreement:

  • Comprehensive – pays for the repair or replacement of your covered auto after it’s damaged due to fire, theft, vandalism, flood, explosion, and contact with a live animal
  • Collision – pays for damage sustained to your vehicle when it collides with another object

When will your policy pay for damages after a crash?

Every standard auto insurance policy has a long list of terms and conditions that explain when your policy will pay. While you can skim through the agreement to find out when your policy will pay, all of the legalese can be difficult for the average insurance consumer to understand.

A brief explanation of the coverage will help.

If you’re in an accident, you need to carry collision insurance for your policy to pay for repairs to your vehicle.

That doesn’t mean that your policy will pay 100 percent of the time. Here are a few of the instances when your collision coverage will pay after you have an accident:

  • You’re in a single-car accident
  • You’re in an accident with one or more cars, and the insurance company has determined that you are at least 50 percent at fault
  • You’re in a hit and run accident, and you didn’t identify the other driver
  • You’re involved in an accident with an uninsured driver
  • Your claim is taking too long to be settled, and your insurer offers to pay for repairs while it’s being investigated

How much will your policy pay for repairs?

Your policy has very rigid liability limits that are listed on the declarations page. When it comes to Physical Damage coverage, the declarations page doesn’t set forth a monetary limit.

Instead of saying that you have $5,000 of coverage, the policy says that your limit is your vehicle’s Actual Cash Value.

In insurance terms, the Actual Cash Value (ACV) of your covered auto is the replacement cost of your vehicle minus its depreciation.

While the costs of taxes, titling and registration fees are factored into the valuation, ACV is similar to your car’s fair market value at the time of the loss.

Under the terms of the standard auto insurance policy, the insurer says that they will only pay up to your car’s ACV regardless of how much damage was sustained in the loss.

If the damage exceeds this value, the car will be declared a total loss, and you will get to choose whether or not you want to keep it.

You can never predict when you are going to need your insurance. That’s why it is so important to build a policy that includes a broad range of coverage. If you want your insurance company to pay for your vehicle repairs, don’t forget to add physical damage coverage.

Use our FREE online rate comparison tool to get estimates and decide which coverage options are best for you.


  1. http://www.360financialliteracy.org/Topics/Insurance/Cars-and-Auto-Insurance/State-by-State-Minimum-Coverage-Requirements
  2. https://www.irmi.com/online/insurance-glossary/terms/a/automobile-physical-damage-insurance.aspx
  3. https://www.thebalance.com/comprehensive-vs-collision-coverage-527402
  4. http://www.edmunds.com/auto-insurance/how-car-insurance-companies-handle-car-accident-claims.html
  5. https://www.dmv.ca.gov/portal/wcm/connect/b97be370-c94f-4198-8c5a-4151bcb47b0e/sr104.pdf?MOD=AJPERES
  6. https://dps.mn.gov/divisions/dvs/forms-documents/documents/autoinsuranceinfo.pdf
  7. http://www.iiat.org/infocentral/policy-coverages/auto-dealers-(iso)/covered-autos-coverage/physical-damage-coverage
  8. https://www.scc.virginia.gov/boi/pubs/naic_und_plcy.pdf
  9. http://www.insurance.ca.gov/01-consumers/105-type/95-guides/01-auto/auto101.cfm
  10. https://www.scc.virginia.gov/boi/co/pc/auto/PP00010105.pdf
  11. http://www.kiplinger.com/article/insurance/T004-C000-S001-collision-coverage-don-t-take-chances.html
  12. http://www.insurancejournal.com/magazines/legalbeat/2009/01/11/157532.htm

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