Can I Insure a Car That Has Prior Damage?

How to insure a car with a dent or scratch or other minor damage

Broken Car Side Mirror
Getty Images/gaiamoments

Does your newly purchased car have a medium-sized dent or a noticeable scuff mark on it? Can you purchase car insurance on a car if it has some prior damage on it? Not everyone is a fanatic about having a pristine car. Sometimes a small amount of damage is tolerable, especially if your bank account is low. It does not necessarily mean you do not want protection in a major accident. Buying physical damage coverage may be possible depending on a few factors.

Prior Damage Is Definitely Not Covered On Car Insurance

Let me make one thing crystal clear, prior damage is never covered on a new car insurance policy. For example, you buy a used car from a friend. It is only a couple years old, however, your friend has a terrible driving record and put a $1000 deductible on both comprehensive and collision coverage to reduce his car insurance cost. A deer bounced off the rear quarter panel leaving a nice sized dent. The repair costs $900, so with a $1000 deductible, insurance will not help. Instead of paying for the repairs, he is selling the vehicle to you. No insurance policy old or new will cover this damage.

Why Does It Matter If a Car Has Prior Physical Damage?

It all comes down to the new insurance carrier not being responsible for providing coverage for the prior damage. Preventing insurance fraud is definitely a priority for insurance companies.

Insuring a vehicle against physical damage with prior damage is understandably a concern. A future filed claim could potentially include the prior damage. Insurance carriers usually associate a damaged car with a higher risk for future claims.

What Should You Do?

For starters, take the price of the repair off of the purchase price of the car.

Saving money on the purchase price may not provide you the cash on hand to make the repair right now. It is time to get your car insurance in order to protect your vehicle against future damage.

Rejection Hurts

Many preferred insurance carriers will not want to provide physical damage coverage to a vehicle with prior damage. (I am talking about more significant damage than a scratch or ding here.) Physical damage includes both comprehensive coverage and collision coverage.

  • Comprehensive CoverageComp is the coverage which covers claims not involving a collision. Sometimes, it is even referred to as "other than collision". If you hit a deer, experience a car fire, theft, vandalism, cracked windshield, or weather related damage, comprehensive will pay the cost of the repairs minus your deductible.
  • Collision CoverageAccidents happen and collision coverage provides assistance when you accidentally damage your vehicle by hitting an inanimate object or another vehicle. Collision is a nice coverage to have especially if your vehicle is valued at six or seven thousand dollars.

Buy Liability Coverage

  • Liability Only: This is the one coverage you can get without any worries. Liability coverage does not protect your car against physical damage. It does, however, protect driver's of the vehicle against damages to other's property and or injuries. Purchasing your state's minimum liability coverage is required in order to legally drive the car. Insurance carriers are not concerned with minor damages to vehicles when purchasing a liability only policy.
    • Safety: In order to get liability coverage, the damage to the vehicle can not be a safety issue. Damage to the main structure frame or airbag could prevent you from getting insurance coverage. Your safety is important! Get all major repairs made before driving it or send it to the scrap yard.
    • Minimum Liability CoverageEach state has its own set of rules regarding minimal insurance coverage laws. Any time you read about car insurance, you usually will find the minimum recommended amounts of coverage are not enough. It really is true! Seriously reconsider buying the minimum coverage and go with the recommended 100,000 / 300,000 limits of liability. $100,000 is the amount which can be paid out per person up to $300,000 per accident. $100,000 property damage coverage is also recommended.  $15,000 to $25,000 is just not enough to protect drivers on the road today.

      Keep Looking, Physical Damage Coverage Is Out There

      It is going to be tough to get a preferred insurance carrier to allow physical damage coverage on a vehicle with damage. If you really want physical damage protection, you are going to have better luck shopping with a non-standard insurance carrier. A non-standard carrier seeks out high-risk drivers and offers rates based on those often negative circumstances.

      • Disclose the Damage: Do not try to hide the current damage. The last thing you want is to be investigated for insurance fraud. It is most definitely not worth the risk or trouble.
      • Agent will Document the Damage: Most likely the insurance carrier will want the damage documented. They will probably have a form to fill out where they list a description of the damage. The agent will want to see the vehicle and most likely take photos of the damage.
      • Filing a ClaimIf a claim is filed, the insurance carrier will have the prior damage on file. Repairs to the preexisting damage will not be repaired.

      Going with a non-standard car insurance carrier is not the perfect situation, especially if you are considered a preferred driver. The rate will most likely be high when compared with a preferred carrier. But, to some, expensive coverage is better than no coverage. Assuming you do have a good driving record, use the non-standard policy just until you are able to make the repairs. Then it is time to start shopping around for a preferred insurance carrier as soon as possible.

      Selecting the Right Insurance Coverage

      Skip the extras. Do not splurge on roadside assistance and rental car coverage. You are going to need all of your extra cash to save up for the repair of the prior damage. Selecting a high deductible on both comprehensive and collision could save you some money. The higher deductible could obviously become a problem if an accident did occur so you really need to weigh your risks.

      What If I Have a Car Insurance Claim And Never Reported the Prior Damage?

      Do not panic! It is really not all that uncommon to file a claim for a significant amount of damage while there is some relatively minor damage to your vehicle which was never fixed. Insurance adjusters have seen it all. And in most cases, an adjuster will be able to see the difference between prior damage and the current claim you are filing. 

      • Be Honest: Let your car insurance adjuster know about the prior damage.The more forthcoming you are with the details of the events, usually the better. Do not try to hide prior damage or deny its existence. If your new damage, directly overlaps the prior damage they might repair it all under one claim. 
      • Multiple ClaimsThe adjuster might decide separate claims need to be filed to cover both the prior and current damages. Two deductibles would be charged and all the repairs can be made at once assuming you had the proper coverage listed on your policy at the time of the prior damage.
      • Ignore the Prior Damage: If you are not concerned about the prior damage, the adjuster will probably tell the body shop to ignore the damage and only repair the damage for the current claim filed. You would need to pay the deductible on the current claim and the repairs would only be made for this particular accident.
      • Insurance FraudIt is unlikely car insurance fraud accusations will arise from filing a claim even though you had prior damage. Do not try to get the old damage covered on the current claim and everything should be fine.

      Example: It is spring time and your son and his friends are hitting golf balls in the yard. Their skill level improves drastically after a few strokes and three of the balls end up hitting the side of your SUV. Three large dents on the driver's side of the vehicle now stick out like a sore thumb. You have comprehensive coverage to help cover the cost of the damage, but you just don't have the time or the deductible money to worry about it right now. Fast forward to fall, deer season has arrived and you are the first to get a deer. Unfortunately, it is with your SUV and not your bow. The deer runs directly into the driver's side door and damages the vehicle from tire to tire. When the adjuster comes out to look at the damage, those golf ball dents are still visible and do not coincide with a deer accident. The adjuster asks you about the damage, you explain the situation, and the adjuster allows for the vehicle to be repaired under the deer claim.

      Some insurance carriers may be stricter than others when it comes to prior damage. It is possible for an adjuster to require two claims to be filed, however with the details in the example above, it is unlikely.

      Car insurance is frequently full of special situations. A lot can happen to a car and circumstances are often different. It is always best to seek out the advice of a licensed insurance agent when you have complicated car insurance questions.