Does auto insurance cover pre-existing damage?

Many vehicles have pre-existing damage. Will car insurance cover pre-existing damage when you need to make a claim? Or will pre-existing damage nullify any future car insurance claims? Today, we’re answering all your questions about whether or not auto insurance covers pre-existing damage.

Prior Damage is Never Covered by Car Insurance

First, let’s make one thing clear. Prior damage is never covered by car insurance. If your car has a huge dent on the side panel, and you never made an insurance claim for that dent at the time, then you will not receive any compensation for this prior damage.

If you want your damage to be covered by car insurance, then two things need to happen:

• You need to report the damage and the incident immediately
• The damage must have occurred from an insure-able event (like a collision with another vehicle)

Typically, prior damage isn’t serious. Some people avoid making a claim for minor damage because it’s not worth it: with a minor fender dent, you’re going to spend more money on your insurance deductible than it would cost to repair the damage. You continue to drive your vehicle while it’s damaged.

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Some Prior Damage Claims Are Considered Insurance Fraud

Your vehicle has prior damage that won’t be covered by car insurance. But you come up with a clever plan: what happens if you make an insurance claim for damage today even though the incident occurred weeks ago?

Let’s say, for example, that your car was damaged by hail a few weeks ago. You didn’t have comprehensive coverage on your policy at the time, which means hail damage was not covered at the time the damage occurred. After your vehicle was damaged by hail, however, you purchase comprehensive coverage – which includes hail damage coverage. Now, you wait for the next hailstorm, leave your car outside, and then make a claim.

This is insurance fraud – plain and simple.

You cannot claim previous damage on a new insurance policy. If your damage was not reported at the time of the incident, then you will not receive coverage for your damages.

Other drivers might attempt a more advanced level of insurance fraud. Let’s say you’re driving home drunk late at night. You scrape the side of your garage driving into your parking spot. You avoid calling your insurance company at the time. Instead, you fabricate a hit and run accident a week later. You claim someone scraped your car in the parking lot and disappeared. You make an insurance claim to get your previous damage covered.

This, once again, is insurance fraud.

Certain Vehicles Will Not Be Covered Due to Previous Damage

Some vehicles have so much previous damage that they won’t be covered by your insurance company. A vehicle might have more than just cosmetic problems, for example: it might have serious damage that affects the safety of the car.

In this case, you might still be able to get liability insurance. However, your insurance company might deny physical damage coverage – including collision and comprehensive coverage.

Collision coverage will cover repairs to your vehicle if you’re involved in an accident. Previous damage might nullify collision coverage because the insurance company cannot determine which damages are new and which damages are old.

Comprehensive coverage, meanwhile, covers non-accident-related damage to your vehicle, including collisions with animals, hailstorms, theft, vandalism, and other unexpected incidents. If your car has previous damage, then car insurance might deny your claim because they can’t determine which damages are new and which damages are old.

You Can Always Purchase Liability Coverage Even on Vehicles with Pre-Existing Damage

A vehicle with pre-existing damage might be ineligible for collision coverage or comprehensive coverage.

However, you can almost always purchase liability coverage – the bare minimum insurance required to drive on the road legally. This insurance covers the costs you inflict upon other drivers and property. The fact that your vehicle has pre-existing damage does not change this coverage. As long as your vehicle is registered and legal, then you should have no trouble purchasing liability coverage.

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Tips for Dealing with Pre-Existing Damage

You may not be able to purchase standard car insurance on a vehicle with pre-existing damage. Instead, you might have to work with a high-risk insurance carrier. Some standard insurance carriers will deny coverage – especially if your vehicle has significant damage.

Here are some tips for dealing with pre-existing damage in a legal way:

• Disclose the damage; don’t try to hide the damage from your insurance company
• Your insurance company will document the damage; your insurance company will send an agent to document the damage, including taking photos of the damage
• If you file a claim in the future, then the insurance company will have the damage on file; repairs to the pre-existing damage will not be covered by your insurance company, but you don’t have to worry about being accused of insurance fraud

Conclusion: Pre-Existing Damage is Unlikely to Be Covered

Ultimately, it’s unlikely for a car insurance company to cover pre-existing damage to a vehicle. Sometimes, drivers will try to fraudulently claim that previous damage occurred in a recent incident. This is insurance fraud.

It’s in your best interest to disclose all damage to your insurance company immediately – even if you don’t intend to make a claim. Failing to report previous pre-existing damage to your vehicle could leave you at risk of being accused of insurance fraud.

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