Cash Settlement for Hail Damage on Car

mrtimn on 10/11/2021 - 11:20

In the recent hailstorms both of our cars (2017 i30 and 2017 DMAX) got hit with hail, so we took them in for assessment and they came back as around $5k in damages each.

To save on premiums our excess was around $1k but we are planning on holding both cars for the next 5+ years and so we don't really care about the hail damage and didn't want to bother with getting them fixed as we'd rather the $2k from not paying the excess however we didn't want to lower the value of the cars if we were in an accident.

Our insurance company said a cash settlement is available, which makes a lot more sense for us to get the cash and keep the hail damaged car.

What would be the potential downsides of this? Future hail storms doing more damage to the car?

Automotive Car Insurance Insurance

Comments

  • deme on 10/11/2021 - 11:27

    To save on premiums

    Show your working

    • mrtimn on 10/11/2021 - 11:51
      +9

      Current quotes are around $700/yr with an $800 excess, however, I bump up the excess to $1000-1200 which means the quote drops to around $550-600, meaning if I don't crash in the 1.5-2years after getting comprehensive then I've made my money back. But if I do have a crash, the excess is still worth it if the damages are severe enough.

  • Hithere on 10/11/2021 - 11:33
    +20

    Will you be able to reinsure the hail damaged car again? Check with your Insurance company.

    • Mechz on 10/11/2021 - 11:35
      +5

      You can usually but the existing damage is noted (if they're not a trash insurer).

    • BOGOF on 10/11/2021 - 11:36
      +2

      Good point. According to the RACQ

      “Most insurers won’t cover vehicles with existing hail damage, or at best, they’ll limit the cover. Remember you’re obligated to be upfront with insurers about the condition of your vehicle including any existing hail damage at the time you’re taking out the cover".

    • mrtimn on 10/11/2021 - 11:52

      They are happy for it to be reinsured, it will just be noted that it is hail damaged.

      • pharkurnell on 10/11/2021 - 12:06
        +13

        and your agreed value will drop like a brides nighty with hail damage if you write it off in future and market value will be a pack of chips.

      • bobbified on 10/11/2021 - 12:45
        +2

        What if next year the premium on the renewal notice goes up (like they always do) and you want to take your business elsewhere where the premium is significantly cheaper? Will they be willing to insure you if tick the box to indicate that there's existing damage?

  • apsilon on 10/11/2021 - 11:34
    +9

    The hail damage would be listed on the policy so you wouldn't be able to claim any future hail damage. Further some insurers won't cover vehicles with pre existing damage or will at least list the damage and not cover it in the future. Of course when the time comes to sell you'll obviously receive offers under market value and less interest in general due to the damage.

    • mrtimn on 10/11/2021 - 11:53
      +3

      I'm happy for the offers at the end to be under market value, because hopefully that discount is equal to the cash settlement being provided to me now. I'd like as least money possible sitting in depreciating assets so having a hail damage car doesn't bother me

  • Euphemistic on 10/11/2021 - 11:52
    +4

    I too would be happy with receiving a payout for hail damage and driving a golf ball car. You need to check the fine print on your insurance policy and be prepared to possibly chip in for any future repairs caused by a crash. I’ve heard of insurers rejecting claims for damage if the part was already damaged by another incident.

    It may be worth replacing removable damaged panels on the cheap (eg wrecker parts) rather than go through the hassle in the event of a future claim.

    • Coops1 on 11/11/2021 - 07:51

      Removable roof?

      • IamEzza on 11/11/2021 - 18:23
        +1

        bonut

  • futureminime on 10/11/2021 - 12:22
    +7

    Had a car written off due to hail damage and going paid out the difference less the scrap value of the vehicle (it wasn't worth that much to begin with).

    Firstly, if you want to swap insurers at some point, it may be more difficult with the existing hail damage. In our case the car was worth scrap so we just stopped getting comprehensive insurance and no issues.
    Secondly, with the existing supply chain issues for new cars, and increasing prices of second hand cars, make sure your agreed insured value post hail damage will leave you in a position to replace the vehicle if an accident occurs. Your logic that if they drop each car value by the cost of the repair +excess (~$3.5k) then you're no worse off, and taking the cash now seems sensible, assuming you're not concerned about future paint damage from the hail. There will probably some in flaking the 5+ years you'll keep the car. Took ~3 years for it to start on our hail damaged car and I don't find it too worrisome, but I probably would if the car was worth more.

    Finally following the second point - check out the resale value of the vehicles through private online sales, and do the maths over whether the ~$2.5k investment in excesses to get both fixed will be better than the cashback. Consider the ability for you to repay financing on the vehicle (if any) and to replace with a similar vehicle.

    Its a weird time with expensive vehicles at the moment, but it may be worse in 5 years when electrics will be rolling out but may still not be cheap enough to swap over. I'd want to not be gambling about the replacement date if you might need a car that isn't a golf ball.

    The compromise might be to get one repaired, and then end up even in terms of paying 1 excess + cashback from other car. That way if you need a more presentable car for business purposes you'll have one.

    • mrtimn on 10/11/2021 - 12:33
      +1

      Thanks for your thoughts, really helpful. There is no financing on either car and the hail damage is only, in my opinion, very minor so I'd have no issues turning up to business events in it (and public perception isn't an issue in either of our jobs either). I think the main unknown will be what the agreed value is on the car post-settlement and that will be the deciding factor whether the excess investment is worth it.

      • ankor on 12/11/2021 - 07:49

        It's sometimes the cost of labour which pushes you over the edge in terms of what is repairable and what is a repairable write-off / cash settlement.

        • Euphemistic on 12/11/2021 - 08:46

          It's normally the cost of labour …

          Anything is repairable if you have the skills and time. When you can remove an replace parts it’s quite often economical. It’s possible to hand form virtually any part. It’s very time consuming and uses lots of skill. That time and skill quickly gets expensive.

  • Drakesy on 10/11/2021 - 12:43
    +8

    get the pay out for the hail damages.
    Buy a $80 dent puller kit from Ebay.
    Like This
    or
    This

    Spent a day pulling dents

    Profit.

    • vinni9284 on 10/11/2021 - 16:26
      +2

      Then sell it in future and the PPSR comes as WOVR hail damage. I have noticed that Mazda 3's ~ 2016 - 2018 are the worst in this situation as I was after one for the missus. Ask the seller .. and it is perfect until the PPSR check comes out. May not be a big deal for some but IMO it drastically devalues the car if sold in the first two years of its life. Only worth the combined $8K profit if the OP keeps them both for several years

      • Drakesy on 10/11/2021 - 17:38

        But It won't go onto the WOVR register though as the owner is being paid the cost to fix the car not the cars value, therefore the car isn't being written off?

        • vinni9284 on 10/11/2021 - 17:52

          That can be correct however in my mindset that normally hail damage (especially the roof) renders the car as a write off? I understand that the insurance has agreed to pay out.. but I'm wondering if that is a verbal offer without inspection.
          I mean a 2017 i30 is not the most expensive car

          • Drakesy on 10/11/2021 - 18:10

            @vinni9284: They'll pay out the repair costs and not the replacement cost of the car, as the repair costs are < value of the car the car isn't written off. The next time you take out an insurance policy just need to clarify that it has hail damage if you haven't fixed it.

            Therefore doesn't end up on the WOVR.

            • vinni9284 on 11/11/2021 - 19:45

              @Drakesy: I see. It seems like the normal repair procedure that doesn't outweigh the cost of the car.

    • Sickman on 11/11/2021 - 05:45

      Have you actually used one of those pullers and the paint is still ok afterwards?
      I have a golf ball car :)

    • Tigercjn on 11/11/2021 - 11:39
      -1

      Good idea, as you would then have no outstanding damage, all damage would be repaired even if it after your repair there is still minor imperfections you can truthfully say that all damage has been repaired.

      You should be able to insure with anyone as it has no unrepairable damage.

    • t_c on 11/11/2021 - 15:11

      I bought before, these don't work imo.

    • chriskq on 11/11/2021 - 20:07

      not sure about recommending ebay USA overpriced kits, esp when ali singles day sale is on today - this kit is good discount

    • iDroid on 11/11/2021 - 20:28
      +1

      Hmm, just watched a few youtube videos of people using those kits (which makes me a certified expert).

      Did it make the dents smaller? Yes.

      Did it fix the dents? No.

  • Diji1 on 10/11/2021 - 13:33
    +1

    To save on premiums

    I never understand why people pay for insurance and then elect to not use it when it comes to an event that they insured themselves for.

    • brendanm on 10/11/2021 - 13:36
      +6

      He's using it, the excess is higher to make premiums lower. Lrn2rd

      • Jugganautx on 10/11/2021 - 13:58

        U Soh W0K

      • smartazz104 on 11/11/2021 - 16:50

        Great, he must have saved enough money for the repairs by now /s

        • brendanm on 11/11/2021 - 17:01
          +3

          He's paying the excess, and getting paid out rather than getting it repaired. Can no one read?

  • brendanm on 10/11/2021 - 13:35
    +2

    Collect cash settlement
    Repair dings using paintless sent guy
    Pocket difference between PDR and cash settlement
    Insure for full value again
    Profit

    • Donaldhump on 10/11/2021 - 17:47
      +1

      where do you send him

      • brendanm on 10/11/2021 - 18:18

        😂 damn phone typing

        • NatoTomato on 11/11/2021 - 15:58

          Can you change your photo back to the cat? It's unnerving.

          • brendanm on 11/11/2021 - 16:43

            @NatoTomato: Never seen Dave chappelle? I'm Rick James!

            • NatoTomato on 11/11/2021 - 17:16

              @brendanm: Oh! I don't care about what you changed your profile pic to, I just care that you changed it.

              • brendanm on 11/11/2021 - 17:47
                -1

                @NatoTomato: Did you like the cat? You are welcome to use it for your profile pic 👍

  • dust on 10/11/2021 - 14:53

    It's so expensive to fix hail damage and devalues the car so much but it's just cosmetic damage usually and has no impact on how you drive/experience a car.

    • Drakesy on 11/11/2021 - 12:18
      +3

      If anything surely it makes the car more aerodynamic.
      Like dimples on a golf ball

      • Kangal on 12/11/2021 - 00:11
        +1

        Just like my regular balls!

    • nephilim on 11/11/2021 - 12:23
      -2

      Its not cosmic though, dent is stretching the metal.
      Same reason why you throw away a hard hat once its been impacted by something, next time it may fail. metal car panels do split.

      • Euphemistic on 11/11/2021 - 12:36
        +1

        Paintless dent repair guys might beg to differ.

        Steel is pretty good at being deformed and returning to shape with some help.

      • brendanm on 11/11/2021 - 16:45
        +2

        Hahaha, unsure if serious.

      • IamEzza on 11/11/2021 - 18:29
        +1

        sheet metal isn't structural

        • spaceflight on 11/11/2021 - 21:38
          -1

          The metal on your car is no longer just sheet metal.

      • apsilon on 12/11/2021 - 08:36

        Partially correct. Metal does stretch when bent and it takes skill and knowledge to return it to it's previous state which is why most places will just do a half arsed job (if at all) and just use bog to hide the imperfections.

        Hail damage isn't going to cause enough damage to effect structure. Write offs are typically for economical reasons and occasionally for damage to areas that are too difficult to access from behind to repair correctly.

  • ABA on 10/11/2021 - 16:25

    This is what I did earlier this year but my car was over 13 years old and I was about get rid of it. I almost took it to the wrecker and one of my friend wanted it badly as his was written off and he couldn't get a new one so it was a win win for both of us.

  • Donaldhump on 10/11/2021 - 17:47

    fml

  • SimbaGirl on 11/11/2021 - 09:42
    +2

    During the massive hail storm we had in Perth in March 2010, around 40,000 cars were written off, many were repairable (i.e. mechanically and structurally sound) but on most, EVERY panel on the car was badly damaged so the insurance companies just wrote them off. The original owners were allowed to keep them under certain conditions such as getting the car inspected when rego was due (which isn’t normally a requirement in WA), but from what I recall, the insurance companies would not re-insure them. Used to see these “golf ball” cars driving around for years afterwards. My old car was sitting out in the storm and not a mark on the bloody thing, dammit - I would have preferred the insurance payout LOL.

  • magpuy on 11/11/2021 - 09:48
    +2

    Some insurers will move you from a Comprehensive policy to a Third Party Property Damage cover. Save you HEAPS in premiums.

  • OzHunterNSW on 11/11/2021 - 10:22
    +3

    Two hail damaged vehicles… in 5 years time the repair bills will be double.

    NO ONE would want to buy a hail damaged vehicle - at market price.

    You are going to lose a lot more than your 2k, or cash in back pocket.

    Think about it.

  • Peck on 11/11/2021 - 12:43
    +4

    If the cars were old, low value, and the repair costs exceeded their value then I would take the cash from the insurance co., keep the cars and insure 3rd party property. As your cars are not old, I would get the repairs done, pay the excess, and move on.

  • stumo on 11/11/2021 - 15:35
    +3

    If I crashed (my fault) into a hail damaged car you can bet I wont be paying you for new panels thats for damn sure.

    Just get it fixed now and avoid opening future cans of worms. Its not like its your fault so next years premiums will only go up the same as everyone elses in your hail suceptible area.

  • MrFunSocks on 11/11/2021 - 16:16

    Wait so they're going to pay you out but you don't need to pay your excess, but if you got it fixed you would?

    • ol mate on 11/11/2021 - 16:54
      +2

      They still need to pay the excess, but they'll cash settle the cost to repair.

      E.g. $5k to repair each car = $10k expense for insurer, less the $1k excess x2 = $8k paid by insurer to OP. Insurer has satisfied their obligation to the OP under the policy (pay to repair the OP's cars), and the OP has satisfied their obligation to the insurer (pay the excess for the claims)

  • kiwimex on 11/11/2021 - 23:18

    Just get them repaired by the insurer and move on………! Or get quotes to repair independently and if its cheaper that way get them back to original condition

  • redslert on 11/11/2021 - 23:32
    +2

    You won't be able to go with another insurer in the future.
    You will be held to ransom by current insurer even if they increase your annual premiums if you want to maintain comprehensive insurance unless you are fine with only third-party.

    • greatlamp on 12/11/2021 - 08:10

      Agree. I took the cash on a hail damaged car, but it was 10 years old already

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