Do I Have to Repair My Car After an Insurance Claim Accident?

This illustration describes when to get repairs after an accident including "If your car is still being paid off on a loan, you will need to make repairs," "Your insurance company will require repairs if you want to continue your collision and comprehensive coverage," and "If you can fix the damage on your own time, you can opt to not file a claim."

Julie Bang @ The Balance 2020 

If you get into a major accident and need to keep driving your vehicle, there's often no choice but to get it repaired. But in a minor fender bender, do you really have to use the money to fix your vehicle, or can you pocket it and go on your slightly dented way?

Whether you must repair your car after an accident and insurance claim depends on the circumstances. If you still have a loan on the vehicle, your lender will demand the repairs.

Can I Repair the Car Myself?

If there's a lien on your vehicle, you likely won't be allowed to repair the car yourself. Your lender may even require you to use an approved repair shop—or at least one that guarantees its work.

If you own your car outright, you may be able to fix the car yourself. Check your insurance policy or ask your agent. Just be sure that doing your own repairs won't affect your coverage.

What if I Have a Car Loan?

If you have a loan on your vehicle, it means you should get the car repaired. Again, your car insurance company may assign or need to pre-approve the mechanic. Your lender will want their collateral—the car—to be fully working and want you to repair any damages.

If you are still making payments on the loan, you do not own the car free and clear. As a partial owner, it is your duty to get the vehicle repaired in a timely fashion. Many lenders require that they are listed on your auto policy as a loss payee. This is to ensure you have full coverage on the car at all times. That's also how lenders know if a claim was filed.

It is good to know up front whether the repair of your vehicle is required. Insurance companies all use the same basic guidelines when it comes to repairs; however, it can still vary per insurance carrier.

Owning your vehicle outright gives you more flexibility when it comes to repairing your car or not. An insurance company will often give you the option to repair, total the car out, or buy it back. That is the option of giving you the car back, plus the cash value of the car, minus the auction price the company believes they would have received from a salvage yard.

Could I Lose Insurance if I Don't Repair the Car?

The insurance company will require repairs if you want to continue your vehicle's comprehensive or collision coverages. The insurance company does not want to keep insuring a vehicle for future physical damage if the vehicle was already damaged and not repaired.

A second accident would compound any existing damage. If the insurance company paid you once for the preexisting damage, they would not want to pay you more for any compounded damage.

It's a standard procedure for the insurance company to require you to drop physical damage coverage from a vehicle that was not repaired. Proof of the repair is usually handled by making a claim check out to both you and the body shop doing the repairs.

Photos and receipts can also serve as proof of repairs if you want to keep your coverage.

When it comes to buying back your totaled vehicle, anything causing a major safety issue will need to be repaired. States may also differ in what they ask to get the vehicle back on the road. For instance, New Jersey requires a salvage certificate for vehicles over eight years old. It then requires a special inspection to be sure the vehicle is road-worthy. Insuring the vehicle, in this case, would depend on the inspection results and may not be worth the expense.

Frame or other structural damage could cause an insurance company to deny coverage. You should always check with your claim adjuster about insuring a previously totaled car. 

What if I Don't File an Accident Claim?

It is common for a driver to opt not to report a claim to the insurance company. You may want to avoid a rise in premiums. It could be a single-car accident (your fault), which many policies may not cover. If you can afford the repair, you may not want to report the claim. If another vehicle is involved, you may have no other choice but to file.

In some cases, you can leave your car damaged and keep the insurance check. But it is a good idea to get guidance from your car insurance claim adjuster so you are not held liable for insurance fraud.

It is tempting to use insurance claim money on other things than car repair. This can be true when the damage is cosmetic and you need the cash. If you want to sell your car down the road, making the repair will help keep the car's value intact. If you really need the cash, you can always have the repairs done at a later date. Just let your insurance agent know when the work is complete so you can restore physical damage coverage.

Frequently Asked Questions (FAQs)

What happens if my car repair costs are different than the insurance estimate?

It's in your best interest to pay close attention while the insurer is negotiating repair costs with the mechanic. Price negotiations will hinge on what kind of parts are used, if things are replaced or repaired, and how much labor is required. The more agreement you can get between all parties in the beginning, the closer the estimate will be to the final cost.

When is it not worth repairing a car?

When a vehicle gets older and starts requiring more frequent, expensive repairs, it can be difficult to decide whether to keep maintaining it or trade it in for a new one. There are different opinions on when a car is no longer worth repairing, but there are some general rules of thumb. If a major repair will cost more than half of the car's value or the car has become unreliable to the point of putting you in unsafe situations, it may be time to trade up.