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  • Writer's pictureSylvain Tornare

What Are the Risks of Keeping a Car That Has Been Damaged by Hail?

Updated: Jan 19, 2022

Several regions in Switzerland have recently been hit by relatively severe hailstorms. As a result, thousands of vehicles were damaged. But is it really necessary to repair a hail-damaged car? We discuss the possibilities for car owners and their consequences.

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Repairing hail damage is very time-consuming and therefore expensive. If one only has liability insurance, the repairs will be at one's own expense. Only a partially (or fully) comprehensive insurance covers damage caused by the forces of nature. If one has a comprehensive policy, one will find him-/herself in one of the following situations:

  • The vehicle is badly damaged and the repair costs exceed its current value. The insurance company will classify the car as a write-off. The insurance company pays the owner a lump sum, from which the deductible (varies depending on the contract) is withdrawn, and takes away the car. One must then quickly find a replacement car.

  • The vehicle is badly damaged and the repair costs exceed its current value. The insurance company will classify the car as a write-off. As hail damage is often superficial (except for damage to headlights, windows, etc.), one may keep the damaged car. The insurance company will then pay the owner a lump sum from which the deductible (varies depending on the contract) and the value of the wreckage will be deducted.

  • The current value of your vehicle exceeds the amount of the repairs and the insurance company decides to repair it. The policyholder pays the deductible (varies depending on the contract).

In the last two cases, the damaged vehicle is kept. What are the advantages and disadvantages of this situation?



The vehicle is not a write-off

If the vehicle is not classified as a write-off, the repairs are carried out. This work generally costs thousands or even tens of thousands of francs. The insured person will have to pay the deductible out of his or her own pocket (varies depending on the contract). Yet, the policyholder could refuse the repairs and keep the car as is. The insurer must approve of this decision. However, if certain repairs are deemed necessary for safety reasons (headlights, windows, panoramic roof, etc.), they must be carried out.


Refusing repairs only makes sense when the damage is only superficial and the policyholder wants to keep an already old car as long as possible, or when the damage is minimal. In this case, the insured person receives a sum to compensate for the damage and keeps the vehicle. However, one should be aware that compensation for future hail damage will probably be refused or reduced. Also, if the damage is not reported to the insurer, the policyholder loses the right to compensation. Finally, if the paintwork has been damaged, rust problems may occur.


In other cases, refusing to repair the vehicle does not make economic sense. Firstly, if repairs are compulsory, the amount of the deductible may quickly be exceeded. The rest of the work is then paid for by the insurer. Some insurances even waive the deductible in the case of damage caused by meteorological events. By carrying out the minimum amount of repairs, the policyholder is, therefore, worse off. Secondly, an unrepaired hailed vehicle has a below-average market value. This loss of value can exceed the deductible (varies depending on the contract). In the case of a leasing contract, the lessee will be charged for the repairs not carried out at the end of the contract. In summary, it makes more sense to repair hail damage.


Unfortunately, a hailed vehicle, even if repaired, remains a burden for the owner. Indeed, a car that has been heavily damaged in the course of its life is likely to be more difficult to sell. Despite excellent repairs, its value will probably be below market and buyers will be sceptical. In leasing, the lessee is responsible for damage to the vehicle. Hail damage can therefore have a negative impact on the residual value of the vehicle and thus lead to additional costs.



The vehicle is a write-off

When the damage to the vehicle exceeds or is close to its current value, the insurance company classifies it as a write-off. Thus, the insurer offers the owner a lump sum. The amount of this sum depends on the contract and the insured value. In the case of hail damage, it may be possible to keep the wreckage and keep using it (as long as the damage does not endanger safety). Its value is then deducted from the lump sum. Moreover, one will not be able to obtain comprehensive insurance anymore.


In the longer term, the problems are similar to those mentioned in the previous case. Selling the wreck later may be difficult or even prohibited for a certain period of time.



Conclusion

Repairing hail damage is usually expensive. If one has (partially or fully) comprehensive insurance, one will only have to contribute to the costs up to the amount of the deductible. If one only has liability insurance, one will have to pay for the repairs.


In general, it is advisable to repair hail damage. If one does not see the need for it, one can renounce such work. However, it is important to get informed on the possibility to refuse the reparation and to be aware of the consequences it implies.


If your vehicle is damaged and you need to change it quickly, come to Carequest! We will find the right replacement vehicle for you within the required timeframe.



 

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